Churn Rate
Definition
Churn Rate: Churn rate measures the percentage of customers or revenue lost over a period. Customer churn counts lost accounts, while revenue churn measures lost recurring revenue. Low churn is essential for sustainable growth, as high churn means constantly replacing lost customers.
Example Usage
“Reducing our monthly churn from 5% to 2% added $500K to our annual revenue without acquiring new customers.”
Common Misconceptions
Related Terms
Net Revenue Retention
Net Revenue Retention measures the percentage of recurring revenue retained from existing customers over a period, including expansions, contractions,...
Customer Lifetime Value
Customer Lifetime Value (LTV) is the total revenue a business can expect from a single customer account over the entire relationship. LTV is calculate...
Monthly Recurring Revenue
Monthly Recurring Revenue (MRR) is the predictable revenue a subscription business expects to receive every month. It's calculated by multiplying the...
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