What Is Customer Churn Rate?

Customer Churn Rate is the percentage of customers who don’t repeat their purchase.

Pay Less Per Customer
Pay Less Per Customer
What Is Customer Churn Rate?

How to Calculate Churn Rate

CHURN RATE= (Lost customers at the end of a cycle ÷ Total customers at the end of the previous one) x 100

Calculating Churn Rate for each of your target segments may help you to maximize customer lifetime value and to get rid of deadbeats before they spend your marketing budget.

(repeat or referral) cycle: daily, weekly, monthly, annual, custom

Example of Monthly Customer Churn Rate

If a business had 100 active customers at the beginning of the month, then 10 of those customers fail to make another purchase by the end of the month, then the monthly customer defection rate would be 10%

Defining Churn Rate, School Style.

CR is a key metric to measure customer retention (or lack thereof) after a renewal cycle. That is to say that customer attrition (another name for CR) can highlight potential problems by comparing customer churn before and after any changes in your company or external events. However, customer attrition cannot explain defection rates by itself. You will need other data to draw useful insights.

This article provides an analytical overview of customer churn, one of many customer retention metrics. Subscribe and receive future posts with all this information.

the horrors of customer churn rate

How to Track Customer Churn Rate?

With a worksheet or a suite of tools, including a CRM application. If you work on WordPress you may use their freemium JetPack CRM, until you find a better solution.

Voluntary vs. Involuntary Churn

Voluntary churn is an intentional act or acts by your customers.

Example: customer cancels a subscription.

Involuntary churn is a sign of financial or technical failures.

Examples: technical difficulties during checkout or financial ones, like insufficient funds in a credit card.

How to Lower Your Customer Churn?

Troubleshooting your customer churn is a trial and error process based on actionable, accurate and timely insights to make decisions.

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Other Names for Customer Churn Rate

Customer attrition, customer turnover and customer defection. This list is non-exhaustive.

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