Formula
Churn Rate = (Customers Lost ÷ Customers at Start of Period) × 100
Calculation Example
If a company starts with 1,000 customers and loses 50, Churn Rate = (50 ÷ 1,000) × 100 = 5%
Data Source
CRM software, customer feedback tools
Tracking Frequency
Monthly, Quarterly, Annually
Optimal Value
Lower is better; churn should be minimized to retain revenue.
Minimum Acceptable Value
A high churn rate suggests poor customer experience.
Benchmark
Industry benchmarks: SaaS ~3-8% monthly, Telecom ~1-5% monthly, Subscription Services ~5-10%
Recommended Chart Type
Line chart (to track trends), Bar chart (to compare customer segments)
How It Appears in Reports
Displayed in customer experience reports to track attrition.
Why Is This KPI Important?
Indicates customer dissatisfaction and potential revenue loss.
Typical Problems and Limitations
Does not distinguish between voluntary and involuntary churn.
Actions for Poor Results
Improve customer engagement, offer proactive support, introduce retention incentives.
Related KPIs
Customer Retention Rate, Net Promoter Score (NPS), CSAT
Real-Life Examples
A streaming service reduced churn from 7% to 4% by introducing a personalized recommendation system.
Most Common Mistakes
Focusing on reducing churn without addressing underlying causes.
