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What is customer churn?

cus - tom - er churn
noun

Customer churn, also known as customer attrition or customer defection, occurs when customers cease purchasing goods or services from a seller or cancel their subscriptions. It essentially represents the loss of clients or customers. This key performance indicator (KPI) considers the percentage of customers who discontinue their engagement with a business or product within a specified time frame.

To calculate the churn rate, you need to take the number of customers a company loses during a specific period and divide it by the number of customers it had at the beginning of that period. The churn rate serves as a metric to assess how quickly customers are leaving your company, product or service. It's important to compare your company's churn rate to the industry average and monitor its changes over time. To gain insights into which customer segments are causing higher churn rates and the reasons behind it, it's essential to analyze customer cohorts.