Definition
The percentage of customers who cancel or stop paying within a given period.
Formula
Customers lost in period / Customers at start of period x 100
How to measure
Divide the count of customers who churned during a month by the total customer count at the start of that month.
Why track it
Churn rate directly caps growth; a company adding 5% new customers a month while churning 5% is standing still.
Example
A company with 1,000 customers at the start of the month loses 40, a monthly churn rate of 4%.
FAQ
- What is Customer Churn Rate?
- The percentage of customers who cancel or stop paying within a given period.
- How do you calculate Customer Churn Rate?
- Customers lost in period / Customers at start of period x 100
- Why track Customer Churn Rate?
- Churn rate directly caps growth; a company adding 5% new customers a month while churning 5% is standing still.