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Business Terms
Churn Rate
Definition
The percentage of customers who stop using a service during a given period.
Overview
Churn measures customer loss. High churn reduces LTV and growth. Reducing churn is often more valuable than acquiring new customers.
Example
Starting with 100 customers, losing 5 monthly = 5% monthly churn rate.
Best Practices
Track churn monthly. Investigate reasons and implement retention strategies.
Common Mistakes to Avoid
Not tracking churn
Ignoring early warning signs
Focusing only on acquisition
Frequently Asked Questions
What's a good churn rate?
Varies by industry. B2B SaaS typically targets <5% monthly. Lower is always better.