Churn rate, also known as customer attrition rate. It is used to measure the percentage of customers who stop using a product or service over a given time. Churn rate is a key indicator of how much the customer retention rate is. Also, indicates the overall business health, especially in subscription-based and SaaS models. 

Formula To Calculate Churn Rate 

Churn Rate (%) = (Number of Customers Lost During a Period) ÷ (Total Customers at the Start of the Period) × 100

Use Cases of Churn Rate 

• Subscription Services: This includes monitoring the monthly or annual customer loss rate.
• Customer Retention Strategies: Identifying patterns to reduce churn and improve customer loyalty with your product or strategies.
• Revenue Forecasting: Assessing the long-term sustainability of customer relationships and improving revenue with better strategies.

Benefits of Measuring Churn Rate 

• Highlights gaps in customer experience and satisfaction.
• Identify the areas of improvement in the strategies for customer retention and engagement for the long term.
• Improved lifetime value predictions and provided useful insights for business planning and crafting marketing strategies.

Reducing churn rate is essential for sustained growth and profitability. Regular analysis helps companies improve customer satisfaction and build lasting relationships.