Churn

Meaning & Definition

Churn is the proportion of accounts that cancel or refuse to renew their subscriptions. A high churn rate has a negative influence on Monthly Recurring Revenue and reflects discontent with a product or service. This may be monitored by actual consumption or failure to renew, particularly if the product is supplied on a subscription basis. A monthly, quarterly, or yearly churn rate is often analyzed for a specified period of time.

The churn rate formula is: (Lost Customers ÷ Total Customers at the Start of Time Period) x 100. For example, if there were 10,000 customers in March and 1,000 left, the monthly churn rate would be 10%.

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