GLOSSARY · CHURN METRICS
Churn rate
Churn rate is the percentage of customers, or of recurring revenue, that a subscription business loses over a period, usually measured each month.
Also called Customer churn rate · Subscriber churn rate · Attrition rate
Customer churn rate counts people: how many of the subscribers present at the start of a period had left by its end. Revenue churn counts money: how much of the starting recurring revenue was lost to cancellations and, depending on the definition, downgrades.
The two can tell different stories. Losing many small customers raises customer churn but barely moves revenue churn; losing one large account does the opposite. Monthly and annual plans also churn on different rhythms, so mixing them in one figure can hide what is happening.
There is no universal good churn rate: it depends on price point, customer type, contract length and market. Compare your rate with your own history and with segments of your base, then split it into voluntary and involuntary churn to know what to work on.
Formula
Customers lost during the period ÷ customers at the start of the period × 100
Related terms
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Sources
- Recurly Docs: Subscriber churn benchmarks docs.recurly.com
- Chargebee Docs: Recurring revenue (Cancellation MRR rate) chargebee.com