Churn

Also called Attrition, Customer churn, Revenue churn

The rate at which customers leave. The quiet number that decides whether growth compounds or treads water.

What it means

Churn is the percentage of customers, or of revenue, lost in a period. Customer churn counts people; revenue churn counts money, and they differ when the customers leaving are larger or smaller than average.

Net revenue churn accounts for growth within remaining accounts, and can be negative — which is a very good thing.

Why it matters

Churn sets the ceiling on growth. At 5% monthly churn you lose nearly half your customers a year, so half your acquisition effort is spent standing still.

It is also the input to lifetime value: halving churn roughly doubles the value of every customer, without winning a single new one.

What it looks like in practice

Measure it monthly and by cohort — customers who joined in the same month tracked together. Overall churn hides the fact that most losses often happen in the first ninety days, which is an onboarding problem rather than a product one.

Ask people why they left. A short, genuine exit question answered by a minority is worth more than any amount of speculation.

What to watch out for

Involuntary churn from failed card payments, which in subscription businesses is often a large share of the total and is fixable with dunning emails and card updates.

Averaging across very different customer types. A single figure spanning your smallest and largest customers describes neither.

Where to get proper advice

Your billing system usually reports this; check how it defines the number before trusting it. Cohort analysis is a spreadsheet job.