💼 Churn

Churn#

The rate at which customers stop using a product or cancel.

Important

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What it is#

Churn (customer churn) is the rate at which customers stop using a product or service over a period — the mirror image of retention, and a defining metric for SaaS, subscriptions, telecom and apps.

The formula and types#

The basic customer churn rate is

\[\text{churn rate} = \frac{\text{customers lost in period}}{\text{customers at start}} \times 100.\]

Beyond this, revenue churn tracks lost revenue (which can diverge from customer churn when large accounts leave), and churn splits into voluntary (the customer cancels) and involuntary (failed payments, expired cards).

Examples#

A SaaS product going from 1,000 to 950 paying users in a month lost 50 — a 5% churn rate. A mobile app where 40% of new users uninstall within 30 days has 40% 30-day churn.

Why it matters#

Churn is recurring revenue walking out the door, and it caps growth: with enough churn, even strong acquisition nets to zero. Because keeping a customer typically costs 5–7× less than winning a new one, reducing churn is usually the cheapest growth lever.

Churn in ML and its mirror#

Teams build churn-prediction models that flag at-risk users from behaviour (logins, purchases, complaints), then intervene with offers, better onboarding or support. And it is exactly complementary to retention: if monthly churn is 5%, retention is 95%.

Theme: Business & Growth Analytics · All terminology

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Mind map — connected ideas

Retention · Revenue per User (RPU / ARPU) · Customer Lifetime · Blended CAC (Customer Acquisition Cost) · SaaS (Software as a Service) · Customer Segmentation

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More in Business & Growth Analytics

Blended CAC (Customer Acquisition Cost) · CAC (Customer Acquisition Cost) · Cannibalization · Channel-Specific CAC (Customer Acquisition Cost) · Cohort · Cohort-Based LTV (Simple Version) · Conversion Rate (CR) · Cost-Per-Click (CPC) Models · Cross-Selling · CTR (Click-Through Rate) · Customer Lifetime · Customer Segmentation · D2C (Direct-to-Consumer) · FTEs