Churn Rate
Definition
The percentage of customers or subscribers who stop buying or cancel during a period.
Want a deeper explanation?
Formula
Churn Rate % = Customers Lost During Period ÷ Customers at Start of Period × 100Churn is the leak in the bucket. A subscription business with 7% monthly churn replaces most of its customer base every year just to stay flat.
Reducing churn usually raises LTV more than raising price. Watch for: involuntary churn from failed card payments, which can often be recovered with better retry settings.
Example
A subscription brand starts the month with 4,000 subscribers and 280 cancel, a 7% monthly churn rate.