Business & Sales

What Is Churn Rate?

Churn rate is the percentage of customers or subscribers who stop doing business with a company during a given period. It is a key metric for subscription businesses, because even a small monthly churn rate compounds into a large share of customers lost over a year.

Formula

Churn rate = customers lost during the period ÷ customers at the start × 100. Losing 30 of 1,000 customers in a month is 3% monthly churn.

Compounding Effect

At 3% per month, about 69% of customers remain after a year (0.97¹²), not 64%.

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🔗 Related Terms

Customer Lifetime Value (CLV) Monthly Recurring Revenue (MRR) Recurring Subscription

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Last updated: September 29, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.