Glossary · Sales
What is Churn Rate?
Definition
Churn rate is the percentage of customers who stop buying from you or cancel their subscription during a given period.
Churn rate % = customers lost in period ÷ customers at start of period × 100
Why it matters
High churn means you are filling a leaky bucket: every new customer you win is offset by one who leaves. Even small improvements in retention add up over time.
A monthly box subscription starts January with 200 subscribers and loses 16 by month end, so monthly churn is 8 percent. At that rate the average customer stays about 12.5 months. Cutting churn to 5 percent extends average life to 20 months, which raises lifetime value by about 60 percent without any new marketing.
Ask departing customers why they left. Common fixes include better onboarding, clearer value, flexible pausing, and fixing failed payments.
Common mistakes
- !Looking only at total subscriber count, which hides losses when new signups mask departures.
- !Not tracking involuntary churn from expired cards.
Frequently asked questions
What is Churn Rate?
Churn rate is the percentage of customers who stop buying from you or cancel their subscription during a given period.
How do you calculate Churn Rate?
Churn rate % = customers lost in period ÷ customers at start of period × 100
What mistakes do beginners make with Churn Rate?
Looking only at total subscriber count, which hides losses when new signups mask departures. Not tracking involuntary churn from expired cards.
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