How Do You Calculate A Pay Sites Retention Rate?

How Do You Calculate A Pay Sites Retention Rate?

For many webmasters the answer may seem simple however, for many more, including some program owners the answer tot his question may not be as simple or, easy to work out as they might have hoped. With that in mind I am going to spend the next few minutes explaining to you the easiest way to work out your paysites retention rate using a method that will not only benefit you as a program owner but also, benefit your affiliates.

Retention - What Is It?

For want of a simplified description, retention is the term given to the 'hold times' that a paysite or, in particular, a paysites member area has to the surfers who join the site. If your site has a high retention level you can be assured that your site will generate you a good base income whilst, if your paysites retention level is low, you will not only make a minimal amount of revenue but, you need to address the reasons why your sites retention is so low.

Calculating Retention Rates.

Okay back to the topic at hand, how do you work out what your current paysites retention rate is as an affiliate owner and, as a revshare affiliate? Well first and foremost the calculations for both are the same however, in order to work out the retention as a revshare affiliate to a program you need to be able to see the following information in your stats, how many users joined the site, how many users rebilled at the end of the current billing period and, how many of those users were rebills from the previous billing cycle. Without this information you wont be able to work out the retention rates in an adequate manner however, assuming you have this information available lets begin the calculations.

The Process Of Retention Calculation.

For the purposes of the following calculations I am going to use numbers that are divisible by a factor of ten for ease after all, we are adult webmasters not mathematicians. Here goes..

Month 1 - You get 100 surfers to join your site using a 'trial' join option, from these 100 surfers who have joined, only 50 of them become 'full paid' members.

This means that the site currently has a retention rate of 50% from trial to full joins.

Month 2 - You get another 100 surfer to join your site using a 'trial' join option, from these 100 surfers who have joined, only 10 of them become full paid members.

This means that in the current month, your retention rate of trial to full joins has dropped 40% from 50% down to 10%.

Month 2 Rebills - From the original Month 1 50 members who converted to a full trial membership, lets say only 10 of those 50 members get rebilled again, you now have a retention rate over a period of 2 months of 20%.

Now this is where the potential problems start..

Month 3 - You have another 100 members join your site using the 'trial' join option, from this 100 members 30 of them convert to a full trial.

This means that in Month 3 you have a 'join' to 'trial' retention rate of 30%.

Month 2 Rebills - From the original 100 members, of which there are now only 10 left from Month 1 joins only 5 rebill, you now have a 3 Month retention rate of 5%

Month 3 Rebills - From the original 100 members from Month 2 rebills, only 3 of them rebill for another period, you now have a 1 month retention rate of 3%.

As you can see from the above figures, month to month, your retention rates can fluctuate and, depending on the time of the month you are working out your retention rates and, the time of year, you could in effect, end up with 31 different retention rates for a single site. With this in mind, regardless of the paysite you are trying to work out the retention rate for, you should ALWAYS use a period of time that is the same so for example, a 30 day period, this will not only allow you to have more reliable figures but, when comparing sites with other sites, you will be able to get a more realistic scale of how well site1.com converts in relation to site2.com.

Paysite Retention - Final Thoughts.

As you have hopefully gleamed from the above, retention rates can vary significantly depending on the factors you use to work them out however, by maintaining an absolute in all of the calculations you use you should be able to not only work out a sites retention rate but, if you make any changes to your methods of promotion or your sites tours you can also judge after a period of time how well any such changes have affected your bank balance. If you change something and your retention rates fall, undo the change. Also, be aware that for the most part, retention rates are only as good as the period of time you calculate them through, the shorter the period of time, the better the retention rate.

Article written by Lee.

http://www.condomcash.com