How Do You Calculate Churn Rate?

1 Answer

  1. Hi maitya, its really easy to calculate the churn rate. Let me walk you through it. So at first you need to determine the number of customers that you lost last quarter and then divide that by the number of customers that you started with last quarter. After that just calculate your result in the form of percentage. the resulted percentage is your churn rate. For example, let’s say a company that started last quarter with 100 customers and lost five over the period of the quarter would have a churn rate of 5%.
    As you can see in the above example, we calculated churn rate as a percentage of customers lost, but there’s more than one way to calculate churn. You can do that in a no. of ways like the number of customers, the value of recurring business lost, the percent of recurring value lost.
    Monitoring churn is the first step in understanding how good you are at retaining customers and identifying what actions might result in a higher retention rate.

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