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Churn Analysis

  • The churn rate measures a company's loss of subscribers for a given period of time.
  • Churn rates can be applied to subscription-based businesses as well as to the number of employees that leave a firm. It can also be thought of as recurring customers leaving the company.
  • The churn rate and growth rate are diametrically opposite factors, as the former measures the loss of customers, and the other measures the acquisition of customers.
  • For a company to experience growth, it must ensure that its new subscriptions are higher than its lost subscriptions in a given period.
  • Each industry will have a different average churn rate that companies can compare themselves with to understand their competitiveness.