Digital Lexicon Hub

The proportion of customers, accounts, subscriptions or recurring revenue lost during a defined period.

Churn rate shows how fast a recurring business loses customers or revenue, which directly limits growth, customer lifetime value and how much the company can spend to acquire new accounts.

A subscription service starts the month with 2,000 customers and 60 cancel during the month. Customer churn rate is 60 divided by 2,000, multiplied by 100, or 3%.

Results change with the method: customer versus revenue churn, monthly versus annual, and whether new customers in the period are counted. Averages can hide concentrated churn in one segment or cohort, and churn shows what happened rather than why.

Customer churn rate equals customers lost during a period divided by customers at the start of the period, multiplied by 100. Gross revenue churn uses recurring revenue lost to cancellations and downgrades divided by starting recurring revenue. Net revenue churn subtracts expansion revenue, so it can be negative. Monthly and annual rates do not convert by simple multiplication because losses compound.