Strategy & economics
Churn rate
Also known as: customer churn · attrition rate
The percentage of customers who cancel, lapse, or become inactive in a fixed time window — usually computed monthly for subscription businesses, per-cohort for one-time purchase businesses.
Churn rate measures customer loss. For subscription businesses, the canonical form is monthly churn: (customers lost during month) ÷ (customers at start of month). Annual churn = 1 − (1 − monthly)^12 — so 3% monthly is ~30% annual, 5% monthly is ~46% annual. For non-subscription businesses, "churn" is usually reframed as lapsed or dormant customers — no purchase in 90/180/365 days, depending on expected purchase cadence. Gross churn (raw customer loss) and net churn (loss minus expansion) both matter: negative net churn means existing customers' expansion revenue exceeds losses, which is the strongest retention position a business can reach. Lifecycle programs target churn reduction as their primary KPI because a 1pp drop compounds into LTV more than any acquisition tuning could.
Try the tool
Read next
Churn cohort analysis: the one chart that tells you if retention is actually improving
A cohort retention curve is the single most useful analytical artifact in lifecycle marketing. It isolates real program impact from the compounding noise that every other metric hides, and it's the one view that survives every limitation of the simpler numbers. Here's how to build one and how to read it without kidding yourself.
Retention economics: proving lifecycle ROI to finance
Lifecycle programs get deprioritised when they can't defend their impact in dollars. The four models that keep the budget — LTV, payback, cohort retention, incrementality — and the four-slide pattern that wins a CFO room.