Churn Rate: Difference between revisions
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Churn Rate = \frac{Total Number of Customers lost (\Delta t)}{Total Number of Customers at the | Churn Rate = \frac{Total Number of Customers lost (\Delta t)}{Total Number of Customers at the Beginning of Period} \times\ 100 | ||
</math> | </math> | ||
Revision as of 15:42, 21 February 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 (\Delta t\) 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:proposal