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Churn rate

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The churn rate, also known as the customer churn rate, is a crucial metric for assessing customer or subscriber loss. It is calculated by dividing the number of lost customers by the total number of customers, typically over a one-year period. Given the direct impact of customer loyalty on a company’s profitability, closely monitoring the churn rate is of paramount importance. This metric is particularly important in sectors where subscriptions are common, such as print media, television, and satellite, among others.

Alternative Meanings:
  • Churn rate

    The concept of "churn" comes from English and refers to the proportion of customers or subscribers lost over time, also known as churn rate. In other words, churn represents the rate at which a subscription-based business sees its subscribers leave due to subscription expiration or cancellation, resulting in decreased revenue. Measuring churn rate is crucial for subscription-based businesses, as it is a key indicator of their long-term viability.

    It's important to distinguish between two types of churn: customer churn, which assesses a subscriber's loyalty over the entire subscription period, and revenue churn, which quantifies the percentage of revenue lost by the business.

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