Churn Rate

A Definition to a Common Term Related to Web Analytics

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Term: "Churn Rate"


Churn rate, also known as attrition rate or customer churn, is a metric used to measure the rate at which customers or subscribers discontinue their use of a service or product over a given period. It is typically expressed as a percentage and calculated by dividing the number of customers lost during that period by the total number of customers at the beginning of the period. For subscription-based businesses, churn rate is often calculated on a monthly or annual basis. A high churn rate indicates that a significant portion of customers are leaving, which can have negative implications for a business, such as reduced revenue and profitability, decreased market share, and diminished brand loyalty. Therefore, minimizing churn rate is a priority for many businesses, and strategies to reduce churn may include improving customer service, enhancing product features, offering incentives or discounts, and implementing targeted retention campaigns. Understanding churn rate is essential for assessing the health and sustainability of a business, identifying areas for improvement, and implementing proactive measures to retain customers and ensure long-term growth and success.

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