Enter the total number of customers lost in the period and the total number of customers at the beginning of the period to determine the churn rate.
Churn Rate Formula
The following formula is used to calculate a churn rate.
CR = #CL / #TC *100
- Where CR is the churn rate (%)
- #CL is the number of customers lost during the period
- #TC is the total number of customers at the start of the period
Churn Rate Definition
A churn rate is defined as the rate at which customers are lost during a time period.
Churn Rate Example
How to calculate churn rate?
- First, determine the total number of users at the beginning or the period.
For this example we will say that our company had 200 total customers.
- Next, determine the number of lost customers through the period.
After a period of 1 month, 20 customers are lost.
- Finally, calculate the churn rate.
Using the formula we find the churn rate to be 20 / 200 * 100 = 20%.
Churn rate is a measure of the rate at which a business or company loses customers to competitors or other factors. A higher churn rate means the business is losing customers at a faster rate.
A good churn rate is dependent on the industry because some business lend themselves to higher customer turnover then others, but the lower the better in all cases.