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Understanding and Living with Normal Attrition | Forum

dave Leader
dave Oct 16 '13

If you are just starting your social site it is important to understand that with any social site regardless of size, attrition comes with the territory.  How much attrition depends on your niche, your content, your customer service, your overall message, and your members themselves.

 

Normal annual attrition rate for the social industry is somewhere between 10%-20% this means that if you have 100 members you can expect to lose 10 of those in a year.  For large social sites this is a huge issue, as an example, if they have 90,000 members then that is 9,000 members a year they lose and you figure 9000 x an average rate of $30 a month low end, that is in best case $270,000 that just walked out the door and that is not even calculating multiple months lost revenue.

 

So attrition is a big deal large or small as it does hit you one way or the other right in the back pocket.  

 

You may be saying, what about free sites, they dont charge a monthly fee?  Well even with a free site attrition hurts them as well.   Sponsors, Advertisers, and Investors watch those numbers like a hawk.  They have formulas they use to calculate to fine detail the number of members, the attrition and what that means to their advertising, sponsorship, and investment dollar.   And if they don't feel they are getting their value for their dollar they will pull the plug on thier involvement.  Which means you just lost that money out of your back pocket.

 

All of this matters because as you grow your social site you need to be thinking about each member and their value to the big picture.  Someone makes you mad or you just may not like someone or they make a small mistake or for whatever reason your first instinct may be to hit that delete button and say "adios muchachos".  But being a good admin is more than just having the access to the tools, its having access and ability to think about the bigger picture and of your goals.

 

So back to "normal" attrition, there is not really much you can do about this kind of attrition.  You will have outright violations of your TOS,  you will  have  accounts that  either for security, policy, or other reasons must be deleted and that is just part of the business we are in.

 

How do you calculate your attrition, well there are lots of formulas but basically:

 

average number of members that left

--------------------------------------------    X   100  = ????  X 100 = attrition percent%

average number of new members   

 

We all have to deal with attrition as part of our business but think about the big picture and be careful not to add unnecessary attrition to that mix. 

 

Feedback always welcomed... hope this helps..

The Forum post is edited by dave Oct 16 '13
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