KPICustomer Success & Service

Churn Rate

Percentage of customers or revenue lost in a given period

What is Churn Rate?

Churn rate is the percentage of customers, or revenue, lost in a period. It shows how much of the existing base leaves.

Churn works against growth every period, so reducing it is often the most efficient way to improve results.

How this KPI is measured

Function
Customer Success & Service
Sub-function
Churn & Risk
Industry
All Industries
Type
Lagging
Impact
Risk
Unit
%
Measurement frequency
Monthly / Quarterly
Formula
(Customers or revenue lost in period / Total at start of period) × 100

How to calculate it

Divide the customers or revenue lost in the period by the total at the start of the period, and multiply by 100.

For example, if a business started the quarter with 1,000 customers and lost 50, churn is 5%.

Decide whether to measure customer churn or revenue churn, and be clear which you report. Track both, since a few large customers leaving can matter more than many small ones.

Where it is used

  • Protecting the customer base

    Track losses.

  • Finding at-risk segments

    See who leaves most.

  • Forecasting growth

    Include expected losses.

How to improve it

Tips and common mistakes

  • Revenue churn and customer churn tell different stories.
  • Small improvements in churn compound over time.
  • Separate voluntary from involuntary churn.

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