Churn rate measures the percentage of customers who stop buying from you over a given period. Reducing churn is one of the most impactful things you can do for profitability.

Calculating Churn

Churn Rate = (Customers Lost During Period / Customers at Start of Period) x 100

View Example

Started January with 1,000 customers
Lost 50 customers during January
Churn Rate = (50/1,000) x 100 = 5%

Why Customers Churn

  • Poor product or service experience
  • Better competitor offering
  • Price sensitivity
  • No longer need the product
  • Lack of engagement or communication
  • Poor customer service

Reducing Churn

  • Identify at-risk customers early (RFM analysis)
  • Implement win-back campaigns
  • Gather and act on feedback
  • Improve onboarding and first experience
  • Provide proactive customer service
  • Create switching costs (loyalty programmes)

Acceptable Churn Rates

Varies by industry. Subscription businesses aim for under 5% monthly. Ecommerce measures differently using repeat purchase rate. We help benchmark against your sector.