Churn Rate

Recently, I roasted a lawyer so well that she called it my full-time job and said I was epic. Coming from a professional debater, that meant a lot. I told her I had too many fancy degrees to justify that path. Within an hour of the roast, we had a quintessential first date. I dropped by after midnight to her dimly lit room filled with photos and a painting she made—our perfect meet-cute. She’s a well-read lawyer with strong views, evident from her bookshelf. Ignoring generic beauty, one of the three love components (emotional, intellectual, physical) in the triangular model was off the charts. I didn’t even notice how the night flew by in her company.

Anyway, coming to the MBA concept of ‘Churn Rate‘. Churn rate measures how many individuals or items leave a group during a set period. For customers, it shows the share of subscribers who leave a supplier in that time. High churn can signal customer dissatisfaction, better competitor offers, or stronger competitor sales and marketing.

People also call it the rate of attrition and use it to signify the percentage of service subscribers who discontinue their subscriptions within a given time period. In most industries, many brands compete, making it easy for people to transfer from one provider to another. The churn rate not only includes when customers switch but also includes when customers terminate service without switching. 

Churn is closely related to the concept of average customer shelf life. For example, an annual churn rate of 25 percent implies an average shelf life of four years. An annual churn rate of 33 percent implies an average shelf life of three years. The churn rate can be minimized by creating barriers that discourage customers to change suppliers (contractual binding periods, use of proprietary technology, value-added services, unique business models, etc.), or through retention activities such as loyalty programs to increase the customer lifetime value (LTV).

The concept of churn rate reveals a couple of interesting insights about modern-day dating. Firstly, while gauging a potential partner, it is important to know their churn rate. It translates into the number of romantic encounters they had in the past and at what frequency. The concept of churn rate reveals a couple of interesting insights about modern-day dating. Firstly, while gauging a potential partner, it is important to know their churn rate. It translates into the number of romantic encounters they had in the past and at what frequency.

When in a relationship to prevent the me-too brands from preying on the customer (date), focus on oxytocin, and the bottom two quadrants of KF4D.

The number of dating partners someone had in the past, the duration of those relationships, and the reasons for calling it off are a couple of data points for the churn rate. The data points reveal several insights since past behaviour often predicts future actions. So you can see if that goes in sync with your plans.

Another important data point is the duration of singlehood (terminate service without switching). Although a high churn rate signals a red flag for serious commitment, an extremely low churn rate (dormant) also indicates inertia against getting involved with anyone. With time, one becomes too comfortable in singlehood, and breaking the inertia might be a hard task. So, you can tread the path and weigh your options accordingly.

As words<actions<patterns, this helps you in making an informed rational decision. Secondly and more importantly, societal loyalty programs trap many of us in relationships with toxic partners. Having a low BATNA (Best Alternative) doesn’t mean that we should continue in painful relationships by falling for sunk cost fallacy. You might have to kiss a hundred frogs before your Prince/ Princess Charming. Don’t get discouraged or settle for unhappiness, fail fast, fail often.

That brings me to the lawyer. So is this it? Is justice been served to my love life finally? Well, she just got out of a toxic relationship and wasn’t looking for anything serious. Also, my churn rate during the past ten days was 400% (4 encounters in ten days). So, even I wasn’t in any other frame of mind. That was the pretext of the date. Though, the NPV of the encounter definitely anchored it quite high; even for diminishing marginal returns. And the dopamine rush that my brain got that night was almost addictive.

Later,

Sidhant