Definition
Churn rate is the share of customers who leave during a period: they cancel, don't renew or stop paying. It's the opposite of customer retention.
Formula
Churn rate = customers lost during the period ÷ customers at the start of the period × 100.
Count only customers who were there at the start, so new customers who join and leave within the period don't distort it. Try the churn rate calculator.
Example
A business starts the month with 400 customers and loses 12. Churn rate: 12 ÷ 400 = 3%.
Monthly and yearly churn
Monthly churn compounds: 3% a month is not 36% a year but 1 − 0.97¹², about 31%.
Early warning
Product usage falls before customers cancel. Watch drifting users and falling account activity to act before churn shows up in billing.