Marketing · business glossary
What is Churn rate?
By Shivam Bhandari · Reviewed 31 October 2026 · How we write
definition
The percentage of customers who stop buying or cancel their subscription over a given period.
Churn rate explained
Churn rate is the percentage of customers who stop buying or cancel in a given period.
formula
Churn % = Customers lost in period ÷ Customers at start of period × 100
example
Starting the month with 1,000 subscribers and losing 50 means 5% monthly churn.
why it matters
High churn means you must keep replacing customers just to stand still, which raises acquisition costs.
common mistake
Ignoring churn while celebrating new sign-ups.
Frequently asked questions
What is Churn rate?
The percentage of customers who stop buying or cancel their subscription over a given period. Churn rate is the percentage of customers who stop buying or cancel in a given period.
How do you calculate Churn rate?
Churn % = Customers lost in period ÷ Customers at start of period × 100. Starting the month with 1,000 subscribers and losing 50 means 5% monthly churn.
Why does Churn rate matter?
High churn means you must keep replacing customers just to stand still, which raises acquisition costs.
What is a common mistake with Churn rate?
Ignoring churn while celebrating new sign-ups.
Related terms
LTV (customer lifetime value)
The total profit a business can expect to earn from one customer over the entire span of their relationship, not just their first purchase.
NPS (net promoter score)
A score based on how likely customers are to recommend you to others, used as a proxy for overall satisfaction and loyalty.
Attrition
The rate at which employees leave a business over a given period, whether voluntarily or not.