Work out membership churn cost instantly with clear inputs, formula shown and shareable results.
Churn costs twice: the recurring revenue that stops, and the acquisition cost of replacing the member. Average lifetime is the reciprocal of monthly churn, so cutting churn from 4.2% to 3% extends average membership from 24 to 33 months.
Members lost
Leavers = Active members x Monthly churn %
Average lifetime
Lifetime months = 1 / Monthly churn rate
Lifetime value
LTV = Monthly fee x Average lifetime months
Almost always. A one point reduction in monthly churn adds more lifetime value than the same spend on acquisition, and it compounds.
In the first three months, before the member has built a habit and before acquisition cost has been recovered.