Customer Churn
What is Customer Churn?
Customer Churn measures the percentage of customer accounts lost over a given period.
Also known as: Churn, Churn Rate, Existing Customer Churn, Monthly Account Churn
Customer Churn Formula
Monthly Customer Churn = Customers Lost During Month / Customers at Start of Month | Variable | Meaning |
|---|---|
Customers Lost During Month | Accounts that cancelled during the month. |
Customers at Start of Month | Active customer accounts at the start of the month. |
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How to Calculate Customer Churn
Worked example
- Monthly customer churn
- 2%
- → Average customer lifespan (months)
- 50
- → Annualized churn
- 21.5%
Customer Churn Calculator
Monthly Customer Churn = Customers Lost During Month / Customers at Start of Month | Variable | Meaning |
|---|---|
Customers Lost During Month | Accounts that cancelled during the month. |
Customers at Start of Month | Active customer accounts at the start of the month. |
Worked example
- Monthly customer churn
- 2%
- → Average customer lifespan (months)
- 50
- → Annualized churn
- 21.5%
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Customer Churn Benchmarks
| Segment | Level | Benchmark |
|---|---|---|
| general | average | 2 % per month |
| general | target | 0–3 % per month |
Common Mistakes with Customer Churn
Customer Churn vs Related Metrics
- Customer Churn vs Revenue Churn — how the two differ and when each matters.
Customer Churn FAQ
How do you calculate Customer Churn?
Divide customers lost during the month by customers at the start of the month. For example, if 2% of accounts cancel each month, the average customer lifespan is 1 / 0.02 = 50 months.
More questions? See the full Customer Churn FAQ.