On Fri, May 16, 2014 at 9:29 AM, Eric Ullrich <er...@hackerlab.org> wrote:
Hi All,Any ideas of industry average on churn rates? I've researched that for gyms its ~25%. Curious about what people are experiencing at coworking spaces.
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We're right around 6% as well, though the number varies wildly from month to month. It seems to fluctuate between 11% and 0%.
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(1) The formula you provided is for calculating monthly churn.
(2) If I wanted to calculate annual churn, I'd use the same formula, but count cancelled customers for the entire year and divide it by active customers at the end of the previous year (then transform from a decimal to a percent by multiplying by 100)?
(3) If I wanted to calculate average (mean) monthly churn for the previous year, I'd then devide the result from #2 by 12?
(4) How do you count canceled customers? Do you only count the ones who were included in your *Previous month's active customers* (or *Previous year's active customers* if measuring annual churn)? I could see arguments for and against, but if you *don't* restrict it to the members who were counted from the previous period, I'd worry that you get very different measures depending on the kind of space it is in a way you wouldn't necessarily want. A space that has a lot of short-term members (travelers, coworking visa users, day pass users, people who read about the business and want to see an exemplar model first hand, etc.), could easily have an annual churn of over 100% while growing in total membership and having a very satisfied user base. If only lost customers from the previous period are counted that same space might have a very low churn rate relative to other spaces that had much lower churn rates when inherently short-term members are included.
I’m curious what you mean by “cancelled customers.” What else would you be looking at? I don’t think drop-in / non-members at all in churn rate, but ONLY members who are paying monthly.