Churn Rate
Churn rate is the percentage of customers who discontinue their subscriptions or stop using a company's product or service during a specific period.
What is Churn Rate?
Churn rate measures the percentage of customers who stop using a company's product or service during a specific period. It’s calculated by dividing the number of churned customers by the total number of customers at the beginning of the period. A high churn rate can indicate dissatisfaction with the product or service, poor customer support or better alternatives in the market.
Reducing churn rate is critical for maintaining a stable customer base, ensuring long-term business growth, and upholding a healthy Annual Recurring Revenue (ARR). Companies often implement strategies such as improving customer service, enhancing product features and offering loyalty programs to retain customers. Regularly monitoring churn rate helps businesses identify potential issues early and take corrective actions to improve customer retention.
