The argument goes that with a service like Dropsend, many people would have a short term use for it, and after that would probably not use it again. Therefore your churn rate is high naturally, but it doesn’t mean that customers are unhappy with the service. Just that they have had their use and moved on, as it where!

To be honest, I was surprised at the low numbers though. I had honestly thought that Dropsend would get a much better subscription rate than this. The advantage though is that there is a whole lot of room for improvement, as in my testing, Dropsend was by far the best of the bunch.

As for the value, at the moment this would surely be based on the revenue, with a healthy factor for potential. My guess would be that the revenue is fairly low, but potential is high. I’m not sure I agree with the x25 figure, but I would say x10 to 15 would be reasonable.

Thanks again!

Don’t publish these numbers as your “churn rate” lest you confuse others. Churn rate is what you accurately described as “what percentage of your customers cancel the service per month.” which would be cancels/# customers, but the numbers you calculated are cancels/signups. Use the 1.2% instead.

Then, show your growth rate number to show that you are signing up folks faster than they are leaving.

I see you are using Google Analytics. How do you find that and will you be publishing your numbers from this? I find it interesting people quoting Alexa numbers all over the web but having true numbers from a tagging solution such as GA means a lot more.

Thanks,
Glen

I see your point about the leaky bucket but the size of the bucket is important too! A dribble out of a swimming pool doesn’t really matter. So your 1.2% figure sounds pretty good, especially when you are throwing 7 buckets in, for every one leaked (err. enough bucket metaphors)

Bill

So if you have 90 accounts and in a month, you add 10 and lose 10, your churn rate would be 10%.

Well, if you want to measure it that way, our churn rate for our Basic plan is only 1.2%

Personally, I would be extremely worried buying a business where a churn rate was over 5% across most accounts per month. The deals I’ve been in, the churn rates were more on the order of 1-2%.

Your churn numbers are deleted accounts per month divided by new accounts per month. Is that really what you want?

It’s the most relevant number, I believe. This helps you make sure you’re not having a “Leaky Bucket” problem.