TMT (Tech, Media & Telecom)
Show me why a change in monthly churn from 2% to 1% is so valuable for a subscription business.
Model answer
Average customer lifetime is approximately 1 / churn rate. At 2% monthly churn a customer stays on average 1 / 0.02 = 50 months; at 1%, 1 / 0.01 = 100 months. Halving churn DOUBLES expected lifetime…
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