Churn Rate: Difference between revisions

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== Definition ==
== Definition ==


Determine the time period <math>(\Delta t\)<math> for which you want to calculate the churn rate (e.g., a month, a quarter, a year).
Determine the time period for which you want to calculate the churn rate (e.g. a month, a quarter, a year).


<math>
<math>
Churn Rate = \frac{Total Number of Customers lost (\Delta t)}{Total Number of Customers at the Beginning of Period} \times\ 100
Churn Rate = \frac{Total Number of Customers Lost (\Delta t)}{Total Number of Customers at the Beginning of Period} \times\ 100
</math>
</math>


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* The rate at which a company loses revenue over a given period of time due to expansions, cancellations, and downgrades.
* The rate at which a company loses revenue over a given period of time due to expansions, cancellations, and downgrades.


{{RFC_Metric|number=23/0106|title=Churn Rate|version=0.9|status=proposal|type=metric}}
{{RFC_Metric|number=23/0106|title=Churn Rate|version=0.9|status=draft|type=metric}}


== See also ==
== See also ==
* [[Revenue Churn]]
* [[Revenue Churn]]
* [[Customer Lifetime Value (CLV)]]


[[Category:Metric]]
[[Category:Metric]]

Latest revision as of 12:46, 8 March 2023

Churn rate refers to the rate at which customers or subscribers discontinue using a product or service over a given period of time. It is a metric used to measure customer retention and is typically expressed as a percentage.

Definition

Determine the time period for which you want to calculate the churn rate (e.g. a month, a quarter, a year).

Details

There are two main variations of Churn Rate:

Gross Churn Rate
  • The percentage of customers who have discontinued using a company's products or services during a particular period, regardless of the reason for the discontinuation.
Net Churn Rate
  • The rate at which a company loses revenue over a given period of time due to expansions, cancellations, and downgrades.

Standardization Status

Request for Comments (RFC): 23/0106 - Churn Rate
Type: metric
Version: 0.9
Status:draft

See also

Sources