Churn
The percentage of customers or revenue lost in a period — the metric that measures how much of the base slips away while the business tries to grow.
Also known as: churn · churn rate · churn rate · churning · cancellation rate
Try CRPRO free for 7 daysChurn is customer loss over a period. If a business gains 100 customers a month and loses 90, it is not growing — it is filling a leaky bucket.
The two churns, and why confusing them distorts everything
- Customer churn — how many cancelled, as a number of accounts.
- Revenue churn — how much revenue walked out the door.
They do not move together. Losing 10 small customers and losing 1 big one can cause the same financial damage with very different churn numbers. Tracking only customer churn hides the loss of the contracts that sustain the operation.
How to calculate it
$$Churn = \frac{customers\ lost\ in\ the\ period}{customers\ at\ the\ start\ of\ the\ period} \times 100$$
Two rules that avoid a misleading number: do not count in the denominator anyone who joined during the period, and keep the window consistent — monthly and quarterly churn are not comparable.
Negative churn
Happens when the expansion of the current base (upgrades, more users, more usage) outweighs what was lost. Revenue from customers who stay grows more than revenue from those who leave. It is the healthiest possible scenario in recurring revenue.
Cancellation is a late symptom
By the time a customer asks to cancel, the decision was made weeks ago. The signs show up earlier: usage dropping, support tickets going unresolved, NPS falling, a contact who goes quiet. Trying to retain someone at the moment of cancellation is expensive and rarely works.
That is why support history matters for retention: without seeing that a customer opened three tickets about the same problem, nobody notices they are on their way out.
Frequently asked questions
What is churn?
It is the percentage of customers or revenue lost in a period. It measures how much of the base slips away while the business tries to grow.
How do I calculate the churn rate?
Divide customers lost in the period by customers at the start of the period and multiply by 100. Anyone who joined during the period should not go into the denominator.
What is the difference between customer churn and revenue churn?
One counts cancelled accounts, the other counts lost revenue. Losing one large customer can cost more than losing ten small ones, and only revenue churn shows that.
What is negative churn?
It is when the expansion of customers who stay — upgrades, more users, more usage — outweighs the revenue lost to cancellations. The base grows in revenue even with departures.
How do I reduce churn?
By acting before the cancellation request, which is already a late symptom. The useful signs are dropping usage, repeated tickets with no resolution, and a contact who goes quiet — all visible in the history, if it exists.
Related pages
Related glossary terms
NPS (Net Promoter Score)
A loyalty metric calculated from the 0-to-10 question about the likelihood of recommending, subtracting the percentage of detractors from promoters.
Average ticket
The average amount spent per order or per customer in a period, calculated by dividing revenue by the number of sales.
Sales CRM
A system that centralizes contacts, history and open deals so the sales team does not depend on memory or loose spreadsheets.
Lead
A contact who has shown some interest in what the business sells and left a way to be reached — not yet qualified by profile or buying moment.
CAC (Customer Acquisition Cost)
How much it costs, on average, to win a new customer — the sum of marketing and sales spending divided by the number of customers acquired in the period.