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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