Customer Churn Rate Measure

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A Customer Churn Rate Measure is a business performance measure that quantifies the rate at which customers cease their relationship with a business over a specific period.



  • (ChatGPT-OpenAI, 2024) ⇒ Prompt: Summarize the concept Customer Churn Rate Measure in 1- 2 paragraphs. ChatGPT (model:gpt-4-turbo-preview). Retrieved: 2024-02-25.
    • QUOTE: Customer churn rate is a key business metric that measures the rate at which customers stop doing business with an entity, typically calculated over a specific time period. It is expressed as a percentage and signifies how many customers a company has lost compared to the number it had at the start of the period. To calculate churn rate, businesses tally the number of customers lost during the period, divide that by the total number of customers at the beginning of the period, and then multiply the result by 100 to convert it to a percentage.

      Understanding churn rate is crucial for businesses because it directly impacts revenue and profitability. A high churn rate may indicate dissatisfaction with the product or service, pricing issues, or better competition. Conversely, a low churn rate suggests customer loyalty and satisfaction. By analyzing churn rates, companies can identify trends, understand the effectiveness of customer retention strategies, and make informed decisions to improve customer relationships and business outcomes. Addressing the underlying causes of customer churn is essential for sustainable growth and maintaining a competitive edge in the market.


  • (Salesforce, 2023) ⇒ Salesforce. (2023). "How to Calculate Customer Churn Rate and Revenue Churn Rate”. In:
    • QUOTE: To determine the percentage of revenue that has churned, take all your monthly recurring revenue (MRR) at the beginning of the month and divide it by the monthly recurring revenue you lost that month — minus any upgrades or additional revenue from existing customers. Do not include new sales in the month, as you are looking for how much total revenue you lost. New revenue from existing customers is revenue you have gained.


  • (Wikipedia, 2020) ⇒ Retrieved:2020-5-15.
    • Churn rate (sometimes called attrition rate), in its broadest sense, is a measure of the number of individuals or items moving out of a collective group over a specific period. It is one of two primary factors that determine the steady-state level of customers a business will support.

      The term is used in many contexts, but is most widely applied in business with respect to a contractual customer base, for example in businesses with a subscriber-based service model such as mobile telephone networks and pay TV operators. The term is also used to refer to participant turnover in peer-to-peer networks. Churn rate is an input into customer lifetime value modeling, and can be part of a simulator used to measure return on marketing investment using marketing mix modeling.