Churn Rate: Difference between revisions
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== Definition == | == Definition == | ||
Determine the time period for which you want to calculate the churn rate (e.g. | 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 | 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= | {{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