What is Customer Churn?
Customer churn is the number of customers who cancel their subscriptions during a period.
This is an easy metric to measure and is often done monthly or quarterly.
While the numbers are an accurate indicator of subscriber gain and loss, they do not reflect the entire subscriber flow. Using sociographic, demograhic and subscriber history data together provides a more meaningful analysis of subscriber behavior and engagement.
How to Calculate Customer Churn
- 1. Determine the total number of customers you have at the beginning of the period..
- 2. Determine how many customers you have at the end of the same period..
Your CRM or accounting system are excellent sources
for this information.
It is the first of the September. You had 1000 subscribers on August 1. At the end of business on August 31 you had 975 subscribers.
975 / 1000 = 25 customers lost for a 3% churn rate.
On the other hand, if you had 1000 subscribers on August 1 and had 1225 on
August 31, then
1225 / 1000 = 225 customers gained for a 23% subscriber increase.
Simple Customer Churn Formula Cheatsheet
Churn = ((Ending customer count - beginning customer count) = gain/loss / beginning customer count)