Churn rate
Definition
Churn rate is the percentage of customers who stop purchasing or cancel within a period. Revenue churn measures the value lost, which can differ sharply from the customer count lost.
Customer churn and revenue churn tell different stories. Losing many small customers while retaining large ones produces alarming customer churn and healthy revenue churn; the reverse is far more dangerous and often reported as acceptable.
For non-subscription businesses, churn requires a definition — typically no purchase within a period substantially longer than the normal repurchase cycle. Choosing that window arbitrarily makes the metric meaningless, so derive it from actual purchase intervals.
Churn rate = Customers lost in period ÷ Customers at start of period × 100
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