When you run a subscription based business such as a premium Discord community, there are few things as important as customer retention management. Given that keeping customers happy and paying their subs every period directly equates to the health of your business, you want to keep your customers happy.

Maximizing revenue is a matter of ensuring that all of your subscribers are retained, but where do you start?

This guide will dive into what churn and retention really are, how to use these metrics to guide your business decisions, and some ways you can really nail down churn and retention!

What is Churn?

Churn, also known as user attrition or customer attrition, is a common business KPI for businesses that are partly or wholly dependent on a subscription-based revenue model. In simpler terms, it refers to the percentage of customers that decide to leave your premium Discord server in a certain period.

There are two main categories of churn.

  • Active churn, which is also called voluntary churn, refers to subscribers who intentionally cancel their subscriptions. There can be many reasons for this, but it’s called active churn because the customer takes a decision to cancel and then acts on that decision.
  • Passive churn refers to customers who cancel their subscription to your premium Discord community without going out of their way to do so. This can happen as a result of failed payment transactions, for example.

What is Retention?

Retention is equally important as a KPI for subscription-based businesses, and you can look at it as the opposite to churn. It measures the ability of your Discord community to hang onto customers and keep them engaged and satisfied over time, and is expressed as a percentage of subscribers that stay with you over the period.

When you look at churn and retention together, you should have a good idea of your Discord server’s ability to keep customers invested. While churn can always happen and passive churn isn’t necessarily a reflection of a failing on your part, there are steps that you can take in order to optimize these numbers and keep your subscriptions flowing in.

We’ll get into some key strategies in this article, but this guide on keeping customers happy might be worth a read in a new tab!

Calculating Churn and Retention 🔢

When calculating the churn and retention rates of your premium Discord server, you need to begin by breaking the numbers down per billing period. A billing period is generally a month. Then, find out how many subscribers you had at the start and end of the month, along with the number of new subscribers who signed up and the number of existing subscribers who terminated their subscription for whatever reason.

Key figures to calculate:

  • Churn rate: The number of subscribers who terminated their subscriptions during the month divided by the number of total customers at the start of the month. For example, if you had 1000 subscribers at the start of the month and lost 15 during the month, your churn rate is 0.015 or 1.5%.
  • Growth rate: The number of new subscribers divided by the number of total customers at the start of the month. Using the same example as above, if you had 1000 subs at the start of the month and gained 35 new customers, your growth rate is 0.035 or 3.5%.
  • Retention rate: The number of subscribers at the end of the billing period, less the number of new customers gained, divided by the number of subscribers at the beginning of the month. Staying with that same example, you have 1020 at the end of the month, less 35 new subs, meaning a retention of 985 out of 1000 or 98.5%.

Why Track Churn and Retention? 🤔

Churn and retention are two sides of the same coin, and you can make a lot of inferences from either perspective. A statistical analysis or simply looking at a graph of a year’s churn can both tell you a lot of things—you might have made certain strategic decisions or experimented at certain times, and you’ll now be able to see whether those actions led to higher or lower churn.

  • Higher churn will have a negative impact on your bottom line. This directly represents the income that you’re losing on a month to month basis, and each subscriber churned out is a lost opportunity.
  • Retention speaks to the sustainability of your business, and it allows you to balance your budget much more easily. Marketing is a critical aspect of managing a premium Discord community, but practically every business has a limited market size.

If you aren’t retaining customers, you’re churning through the market, and customer acquisition is going to get more and more expensive as you go. A high retention rate therefore can keep the pressure off the marketing side of the business, since you’re not reliant on an influx of new customers to maintain your revenue.

Keeping an eye on your churn and retention metrics is also a great idea, not only to figure out things like marketing spend, but also to refine your products and content quality from a data-driven perspective. The predictive insights you can accrue by seeing what effect your moves have on your subscriber numbers can contribute to optimized decision-making going forward.

How to Manage Churn and Retention

Now that we’re clear on what churn and retention are and how crucial it is to keep an eye on them, let’s take a look at how you can manage them for maximum success

1. Be Proactive

When it comes to churn, getting ahead of the issue and preventing it before it happens is always a better approach than scrambling for solutions once the problem is spotted! Understanding the level of customer satisfaction in your premium Discord community is a good idea, and keeping tabs on how happy people are will allow you to step in before things become problematic.

One great way to do this is to ask for feedback as often as you can without it becoming an annoyance. This’ll allow you to monitor the satisfaction of your subscribers and also make adjustments to your products and services as and when needed. Analysis of user interaction on your premium Discord server is also a good idea, because it can lead to valuable insights.

Don’t discount the power of surveying when customers terminate service, as well. Exit intent surveys might not always receive a response, but you can learn a lot from this. Crucially, you might also be able to identify causes of passive churn in this manner and get on top of the problem.

2. Offer Exclusive Content

If you’re running a premium Discord server, your subscribers are parting with precious cash to be part of it. With that in mind, one of the best ways to keep them happy is to provide them with as much exclusive content as possible!

Your customers want to feel that they’re getting what they paid for at a bare minimum, so they’ll appreciate it if you go above and beyond. If you’re running a trading server, give your users more tools and education. If you’re running a sports betting server? More workshops!

Whatever your server type, your subscribers will appreciate more exclusive content, making them less likely to churn out.

3. Analyze Your Competitors

As the owner of a premium Discord server, you’re doubtless aware that competition is rife. There are probably a lot of other businesses offering similar products and services to yours, so keep an eye on what they’re doing.

You can learn a lot from everything your competitors do, from their pricing to their product mix, what content they offer subscribers, and even the timing of their programs and promotions. This’ll give you a good idea of what works and what doesn’t, and you can refine these ideas and give your subscribers the very best, increasing retention dramatically.

4. Accept Multiple Payment Methods

We’ve already mentioned the fact that passive churn tends to happen due to failed payment transactions, so expanding the number of payment methods you offer is one of the best ways to tackle this problem.

By opening up more channels for payment, you ensure that your subscribers have every possible option at their disposal. This’ll also open you up to more new customers, some of whom simply may not want to sign up in the first place if their preferred method isn’t accepted.

It might be worth looking into crypto payments as well, for those subscribers who either enjoy the bleeding edge of tech or simply prefer to avoid the involvement of banks. Luckily, Whop is on board with crypto payments too!

5. Maintain Consistency and Persistence

Whatever the type of premium Discord server you’re running, it’s important to keep on top of churn and retention using the above strategies. Doing one round of surveys and leaving it there just isn’t going to cut it in your competitive climate, so keep iterating and improving your server!

Final Thoughts: Why Churn and Retention Matters

Churn and retention are key metrics to manage when it comes to any business, but it’s especially important in earning money through a subscription-based model such as a premium Discord community. Reducing churn and increasing retention ensures that your revenue is as healthy as it can be, and you can help by employing strategies such as being proactive, offering exclusive content, and analyzing competitors.

Whop can help you maximize retention and decrease churn with a variety of benefits such as storefront management and top quality customer service, so by selling on Whop you’re already winning the battle.

👉 If you aren’t already on Whop, sign up in just a few minutes and make the most out of your premium Discord community!