Active vs passive churn, and why the split matters

Passive churn is when a customer leaves without meaning to, most often because a payment failed. Active churn is when a customer decides to cancel. Both look identical in your churn rate. They need different fixes. In this mini-episode of Datadrivet, Joni Lindgren and Jasmin Yaya split churn along that line.

Jasmin’s example of active churn is cancelling her own Netflix subscription.

Passive churn, which the hosts also call unintentional churn, happens without the customer knowing they’ve left. A credit card expired while the customer still wants the service.

A customer who decided to leave has a value problem. Address it before they reach the cancel button. A customer who left by accident has a billing problem. A reminder or a card-update prompt often recovers them.

Before you try to lower churn, separate the customers who chose to go from the ones who slipped away by accident.

The hosts invite listeners to share on LinkedIn how their own companies measure and reduce churn.

Listen to the full episode of Datadrivet for the full breakdown. To find out whether your churn rate is normal for your model, use the benchmark tool: https://benchmark.scilla.studio