What is Birchbox’s Monthly Churn Rate?
This was originally an answer I posted on Quora in response to the question: What is Birchbox’s Monthly Churn Rate?
I’m estimating that their churn is approximately 8 or 9%. I suspect it started very low (near 5% in 2011/2012) and has slowly ramped up as they have reached serious scale (now, 55 months in to being live). Obviously, this is just an intelligent guess, but I think it makes sense.
With subscriptions at such a low price point, maintaining a churn of < 10% should be relatively doable if the product offering is decent. Theirs is decent. This gels with the churn we’re seeing on Cratejoy subscriptions for beauty products with a low price point. With a churn much higher than that, they would need to add absolutely ridiculous numbers of subscribers per month.
I have a bit of insider information from some fortunate lunches with an early employee that corroborates the < 10% churn as well as some of the COGS assumptions I make below.
I created the model using a modified version of the output from the subscription box business calculator.
I used the following datapoints for my estimate:
I built the model by using the subscription box calculator on Cratejoy. I downloaded it to excel and tweaked it from there until it matched the datapoint on subscriber counts and roughly made sense.
I’m estimating that their churn is approximately 8 or 9%. I suspect it started very low (near 5% in 2011/2012) and has slowly ramped up as they have reached serious scale (now, 55 months in to being live). Obviously, this is just an intelligent guess, but I think it makes sense.
With subscriptions at such a low price point, maintaining a churn of < 10% should be relatively doable if the product offering is decent. Theirs is decent. This gels with the churn we’re seeing on Cratejoy subscriptions for beauty products with a low price point. With a churn much higher than that, they would need to add absolutely ridiculous numbers of subscribers per month.
I have a bit of insider information from some fortunate lunches with an early employee that corroborates the < 10% churn as well as some of the COGS assumptions I make below.
I created the model using a modified version of the output from the subscription box business calculator.
I used the following datapoints for my estimate:
- 45,000 subscribers in September of 2011 (Birchbox secures $10.5M for beauty samples mailing)
- 100,000 subscribers in May of 2012 (Birchbox Co-Founder Katia Beauchamp: We’re Poised To Grow Way Beyond Beauty [TCTV])
- 400,000 subscribers in September of 2013 (With 400,000 subscribers, Birchbox expands from beauty-in-a-box to lifestyle products)
- 800,000 subscribers in July of 2014 (Birchbox, Inc.: Private Company Information)
I built the model by using the subscription box calculator on Cratejoy. I downloaded it to excel and tweaked it from there until it matched the datapoint on subscriber counts and roughly made sense.
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