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Finance & Moneyadvanced

Churn Rate

Definition

The percentage of customers or subscribers who cancel or stop buying within a given time period. Monthly Churn Rate = (Customers lost ÷ Starting customers) × 100.

Why it matters

High churn destroys subscription businesses. You are constantly filling a leaking bucket. Reducing churn is almost always more valuable than acquiring new customers.

Example

You start the month with 200 subscribers and lose 10. Churn rate = 5%. That means if you add no new members, you'll lose half your subscribers in about 14 months.

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