Churn — Meaning and details

Churn refers to the rate at which customers stop doing business with an entity, which can be measured in the context of lost customers, or as the percentage of service subscribers who discontinue their subscriptions within a given time period. In a broader sense, it can refer to the number of individuals or items moving out of a collective group over a specific period.

Churn rate is typically calculated by dividing the number of customers lost during a specific time period by the total number of customers at the beginning of that period. For example, if a company starts a quarter with 100 customers and loses 5 of them by the end of that quarter, the churn rate is 5/100 or 5%.