What is churn rate?
Churn rate is the share of a starting customer or recurring-revenue base lost during a defined period. It makes losses comparable as a percentage, even when the size of the business changes.
Customer churn and revenue churn answer different questions
Customer churn counts lost accounts. Revenue churn counts recurring revenue removed through cancellations or downgrades. Track both: a low number of lost accounts can still have a large financial impact when those accounts are high value.
- Customer churn: customers lost ÷ customers at the start × 100.
- Gross revenue churn: recurring revenue lost ÷ recurring revenue at the start × 100.
- Retention: for the same customer cohort, 100% minus customer churn.
Measure a consistent cohort
Use a starting value captured at the beginning of the period and losses from that same population. Keep new acquisitions out of the starting cohort, and separate expansion revenue when you want gross churn. Consistent definitions make trends more useful than a single isolated result.