Customer Churn

Customer Churn is the measurement of customers that stop using a product or service over a determined period of time. This value is usually known as churn rate or attrition rate because it is calculated by dividing the number of customers a company loses during that period of time.

Often in the channel, customer churn refers to the rate at which subscribers discontinue their pay-for-service subscriptions for SaaS-based technology services. This metric is crucial as it directly impacts the growth potential and market expansion of a business. As regular payments for access to the application cease, high churn rates can impede growth objectives and market share expansion, making it a top-priority metric to monitor and mitigate.

The term customer churn is often synonymous with customer turnover, and the term colloquially comes from the idea of customers leaving or “churning away” because they are not satisfied with the product or service a company provides.