Why Churn analysis in business and marketing context?

Every business wants to people repeat purchase of their products and services and keep their subscriptions active. Is important to up-sell and cross-sell to new and premium products and services, but often they forget to keep and only focus on getting new customers.

That’s why we think that Churn rate is very important in any business. It means how many customers stop using a company’s product or service over a period, like a month or a year. It’s a key sign of how well a company keeps its customers and makes them happy. Managing churn rate is particularly important for a business to grow and do well, especially for businesses like phone companies, software services (SaaS), and online services where customers pay regularly (like monthly subscriptions).

Using Google Analytics 4

Nowadays, digital tools like Google Analytics 4 (GA4) are useful for understanding churn rate. GA4 it is the tool for tracking how people use websites and apps. It has new features like focusing on users, tracking across different platforms (like websites and apps), and using AI to give insights. Remember that GA4 differs from the older version, Universal Analytics, in how it collects and shows data.

With GA4, companies can see how customers interact with their websites and apps. It uses special calculations to guess which customers might stop using the service, helping companies to keep their customers. For example, in GA4, you can look at groups of customers who buy things or buy things often and see how they behave.

Examples in Google Analytics 4

A Cohort is a very good example for analysing revenue across cohort groups per user each month.

Inclusion criteria: Purchase / Return criteria : Purchase / metric : purchase revenue per cohort user

When we talk about churn rate, we also need to choose the right ways to measure it.

These can include with Google Analytics 4 or without Google Analytics 4 but retrieving information in custom dimension to create audiences and segments :

- Customer Lifetime Value (CLV): How much money a customer will bring in over time.
- Customer Acquisition Cost (CAC): How much it costs to get a new customer.
- Customer Retention Cost (CRC): How much it costs to keep a customer.
- Customer Satisfaction Score (CSAT): How delighted customers are with the product or service.
- Net Promoter Score (NPS): How likely customers are to recommend the product or service.
- Customer Effort Score (CES): How easy it is for customers to use the product or service.

These measurements help understand why customers leave and how to keep them. GA4 can help visualize some of these metrics.

Another key step is to group your customers based on how likely they are to leave, how they behave, and how important they are to your business.

You can see in the predict metric to get users that LTV > 0 and churn probality in 80^th percentile (prediction is 7 day window)

see more about audiences and segments in Google Analytics 4

Another way you can use GA4 to update your digital user data with their churn risk status and create targeted messages for distinct groups. You can integrate CRM and other offline data to make churn rate tied to business value of the customer.

See more about our roadmap to Data-driven Marketing

In summary, understanding churn rate and using tools like GA4 can help businesses keep their customers happy and loyal.

We have a training course for Google Analytics 4, see our dates and register and save your place.

references:

https://support.google.com/analytics/answer/9267572?hl=en#zippy=%2Cin-this-article