Calculate the cost impact of errors
Errors and any other interruptions are one of the major sources of frustration for customers. Vimeo recently released data that says that 6% of SVOD users churn due to technical reasons. So in essence there is a real cost to every error that a viewer on your platform experiences. We made the effort to calculate how costly an error is.
AVOD
S. Shunmuga Krishnan and Ramesh K. Sitaraman have calculated that “a viewer who experienced failure is 2.32% less likely to revisit the same site within a week”. Based on this research we created the following calculator:
The cost of 1000 errors based on your inputs is
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SVOD
Using Vimeo’s “Technical Churn Rate” of 6% we calculate how much a decrease in errors can prolong the customer lifetime value for this particular churn reason.
Based on the inputs you provided, the lifetime value for the technical churn reason viewer segment can be prolonged by
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- Formula Cost per AVOD Error: [Plays per Unique] x [CPM] x [Ads per play] x [Recurring viewers] x [% less likely to return]
- Formula SVOD rate: ( [# of errors over LTV] - ( [# of errors over LTV] x (1 - [Target error decrease] ))) x [Errors per day] / [LTV]
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