What Is Churn?

Written by Indicative Team


Churn Defined

Churn, or customer churn, is an important metric for companies to track when trying to expand their business. This metric represents the number of customers that have stopped using your product or service during a given period of time. Ultimately, your company’s churn will identify your overall customer retention rate. Knowing your company’s churn rate is important because it costs more money to acquire a new customer than retain a current one, so it could affect your company’s operating costs.

You can calculate this metric by dividing the number of customers you lost during a certain time period (i.e. Quarter 1) by the number of customers you had at the beginning of that time period (i.e. Quarter 1).

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