Customer churn rate

This calculator measures the percentage of customers who cease to do business with your company within a certain timeframe, thus allowing for strategic planning to mitigate these losses.

Calculate your churn rate

How we calculate customer churn

Customer Churn Rate (%) = (Customers at the Start of the Period – Customers at the End of the Period) / Customers at the Start of the Period * 100

What is a Customer Churn Rate?

The Customer Churn Rate, often simply referred to as churn rate, is a crucial metric that calculates the proportion of customers who have ended their relationship with a business over a specific period. This rate is a critical indicator of customer dissatisfaction, service issues, or better offerings by competitors. Recognizing the churn rate helps businesses understand the effectiveness of their customer retention strategies.

Why It's a Useful Metric

Monitoring the Customer Churn Rate is vital for any business aspiring to grow and maintain a healthy customer base. High churn rates can significantly impact revenue and profitability as acquiring new customers is generally more expensive than retaining existing ones. Additionally, analyzing churn helps identify potential problems within your service or product offerings and provides a clear insight into customer needs and expectations. This understanding enables companies to take corrective action, improving customer satisfaction and loyalty over time.

How to Interpret Your Customer Churn Score

Interpreting the Customer Churn Score involves understanding how fluctuations might impact your business. Generally, a lower churn rate is desirable, indicating that fewer customers are leaving your service:

  • Below 10%: This is typically considered excellent in many industries, showcasing strong customer satisfaction and loyalty.
  • Between 10% to 20%: While still in an acceptable range, this indicates room for improvement in customer retention strategies.
  • Above 20%: A churn rate higher than 20% can be alarming, suggesting significant issues with your product or service that need immediate attention.

Like with Customer Retention Scores, it's crucial to benchmark your churn rate against industry standards to fully grasp its implications for your business's health and long-term viability.