Churn Rate is the percentage of customers (or revenue) you lose over a given period — the opposite of retention, and a critical metric for any subscription or repeat-purchase business.
Churn rate = (Customers lost in period ÷ Customers at start of period) × 100
Start a month with 500 customers and lose 25, and your monthly churn is 5%. Revenue churn tracks lost revenue rather than customer count.
Churn silently caps growth: if you lose customers almost as fast as you win them, acquisition spend is wasted. High churn also crushes lifetime value, which breaks your unit economics. Reducing churn is often cheaper and more profitable than acquiring new customers.
Divide the number of customers lost during a period by the number you had at the start, then multiply by 100. Revenue churn uses lost revenue instead of customer count.
Because it caps growth and erodes lifetime value. If customers leave almost as fast as you acquire them, acquisition spend is wasted and unit economics suffer. Lowering churn is often more profitable than new acquisition.
It varies by industry and model, so benchmark against your sector and track the trend. Lower is better; the goal is to reduce it over time and keep it well below your growth rate.
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