The abandonment rate is expressed in terms of interest or money and refers to the customers who have left the company. This is how the decline in revenue is implied. Calculation of this indicator is necessary for business because it allows us to determine the losses in the competitiveness of the offer of the organization.

Content
  1. How to calculate the abandonment rate
  2. What are the reasons for the abandonment rate
  3. How to reduce the abandonment rate

How to calculate the abandonment rate

The process for calculating the abandonment rate is relatively simple if the company has a clear identification of the missing customer and takes this indicator into account. For example, if your abandonment rate is 5%, this means that your active customer base decreases by 5% each month. Giving up could be $2,000: In this case, you lose $2,000 per month in revenue due to a client or download cancellation.

To find your abandonment rate, divide the number of customers lost by the number of customers you had at the beginning of the month, for example, and multiply it by 100%.

The more buyers you have today, the fewer they will stay with you tomorrow, which means that the cost of each new customer, such as the difficulty of their search, increases exponentially. If existing users continue to be lost, it will be more difficult to find other users.

Customer abandonment is an indicator of problems with the product itself, so it is very important to monitor and analyze the abandonment rate. One needs to understand exactly why customers reject and eliminate the deficiencies discovered in the product because only this will reduce abandonment.

What are the reasons for the abandonment rate

  1. Product quality is low: People become your customers because they needed your product or they value its high quality, but soon it may go down, and they are no longer satisfied, so you lost them.
  2. Bad service: not only product quality is essential, but also service is essential. Maybe your customers have been waiting for their order for 2 weeks, but you promised to deliver it within 5 days, or you sent the defective goods. Any of your mistakes can easily make your customer leave you in search of better service.
  3. Brand loyalty drops: it happens that potential customers find negative comments about your company somewhere, and this prevents them from doing business with you. Moreover, you may have made a mistake once, and it will hurt even if it does not spoil your reputation. Thus, people lose faith in your brand.
  4. Attractive offers from competitors: Competitors always try to offer more attractive offers at lower prices, which is very good because it makes you develop and improve your business. Most of the time, people choose something cheaper, or are only interested in new and original products and services.
  5. Personal reasons: reasons such as changing interests, needs, preferences, and lower income.

How to reduce abandonment rate 

Abandonment cannot be prevented, but it can be reduced. Abandonment rate means dissatisfaction with your work. Who knows the reasons better if not your customers? Ask them! You need to create and maintain relationships with them not just to get your regular income but to get better.

  1. Ask your customers what they are not happy with, what could be improved, or what they expect from your service/products.
  2. Create a survey where you can ask the question “What do we need to improve our services to improve?” Note that you will likely take customer advice into account.
  3. Make it easy for subscribers to leave feedback on your work.
  4. Do not forget to reward your loyal customers, offer them special discounts.

Therefore, there are many opportunities to reduce the abandonment rate, but it takes a lot of time and effort. Analyze your business, contact your customers and take the necessary steps to improve!