What is Churn Rate?
Churn Rate
Churn Rate is the percentage of customers or subscription revenue that a startup loses over a specified period.
Why It Matters for Startups
Serves as a vital financial metric for unit economics and investor reporting; tracking Churn Rate helps founders manage cash runway and growth efficiency during customer retention and satisfaction metrics.
Detailed Deep Dive
Churn Rate is the percentage of customers or subscription revenue that a startup loses over a specified period. High churn rates are dangerous as they make growth expensive by constantly depleting the customer base.
Frequently Asked Questions
Q:How is churn rate calculated?
Customers lost during period divided by starting customers in that period.
Q:Why is a high churn rate dangerous?
It makes growth expensive; if you lose customers as fast as you acquire them, you are spending money on a leaky bucket.
Quick Facts
- CategoryMetrics
- Key ApplicationCustomer retention and satisfaction metrics
Coverage Trend12 Weeks
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