What is Churn Rate?
The measure of customer retention and its effect on business
Churn Rate is the percentage of customers lost over a specified time. It measures customer retention and business health.
Calculating Churn Rate
If 100 customers start the year and 50 remain at the end,
ChurnRate = (100−50)/100 = 50%
Churn rate can be calculated for any period but is usually annualized. Multiply monthly churn by 12 or daily churn by 365 to estimate yearly rates. Longer periods and more data generally increase accuracy.
Variability
Churn varies across customer segments, products, and acquisition sources. Upmind provides both short-term and long-term churn rates to help identify retention trends.
Why Churn Rate matters
Churn rate helps determine customer Lifetime Revenue (LTR) and Lifetime Value (LTV), key metrics for understanding each customer's value to your business. It also highlights issues, such as if churn rises, you can investigate the cause.
Updated 17 days ago