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Glossary > Churn Rate

Churn Rate

Churn rate represents the percentage of users or customers who stop using a product or service within a given timeframe.

It serves as a crucial metric for businesses to evaluate the health of their customer base and measure the effectiveness of their retention strategies.

By tracking churn rate, businesses can gain insights into user satisfaction levels, identify potential issues with their product or service, and assess their overall growth potential.

Frequently asked questions
How do I calculate churn rate? Determine the time period for which you want to calculate churn rate. First, count the number of customers or users you had at the beginning of that time period. Then, count the number of customers or users who stopped using your product or service during that time period. Divide the number of customers lost by the total number of customers at the start of the period. Multiply the result by 100 to express churn rate as a percentage. Formula: Churn Rate (%) = (Number of lost customers / Total number of customers at the start of the period) x 100
What is considered a good churn rate? A good churn rate varies by industry, but generally, lower rates are desirable. For example, in mobile apps, 30-day retention rates typically range from 2.4% to 11.3%.
What factors can contribute to a high churn rate? Factors like poor user experience, product bugs, low perceived value, pricing issues, competition, and attracting the wrong customers can lead to high churn rates.
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