What is customer churn?
Churn is the share of customers who stop using or paying for your product during a period, such as a month. If you start the month with 800 customers and 24 of them leave, your monthly churn rate is 3%.
Churn in one rate
Churn counts the customers you lose. In a subscription business, a customer churns when they cancel or stop renewing; in a shop or a service, when they stop coming back. The churn rate turns that count into a share of the customers you had at the start, so you can follow it month by month.
Churn matters because every customer who leaves takes their future revenue with them, and a small monthly rate adds up. Losing 3% of your customers each month means losing close to a third of them over a year.
The rate tells you how many leave, and it doesn't say why. Cancellation surveys, exit interviews and the answers customers gave before they left fill that gap, and they point to what to fix first.
- Measures
- The share of customers lost in a period
- Calculated as
- Customers lost ÷ customers at the start × 100
- Also called
- Attrition, customer churn rate
- Opposite
- Retention rate
- Explained by
- Cancellation and exit surveys
How to calculate churn rate
Pick a period, such as a month. Count the customers you had at its start and the ones among them who left by its end, divide the second number by the first and multiply by 100.
Leave out the customers who joined during the period, or the rate mixes two things: how many you lost and how many you won. Track new customers on their own.
Churn rate = customers lost in the period ÷ customers at the start × 100
Customers who join during the period are left out of both numbers, so new sign-ups can't hide the ones who left.
A churn rate example
Say you start March with 800 customers. During the month, 60 new customers sign up and 24 of the original 800 cancel, so you end the month with 836.
24 of 800 is a 3% monthly churn rate. The 60 new sign-ups don't change it; they show up in your growth, which is a separate number.
- Customers on March 1
- 800
- New customers in March
- 60, left out
- Customers lost in March
- 24
- Customers on March 31
- 836
- Monthly churn rate
- 24 ÷ 800 = 3%
Why customers churn
The reasons fall into a few groups, and in a cancellation survey two or three of them usually make up most of the answers. Fix those first.
- The price feels too high for what they get
- They don't use the product enough to keep paying
- A feature they need is missing
- They moved to another product
- The product is too hard to use, or has bugs
- Their project or business came to an end
Cancellation survey questions
Ask in the cancel flow, before the final confirmation, while the reason is clear in the customer's mind. Keep it to two or three questions: the main reason as a single choice, an optional open question, and permission to follow up.
- “What could have made you stay?”
- “What would bring you back?”
- “Would you rather pause your plan or cancel it?”
- “Can we contact you if we fix what made you leave?”
Types of churn
Churn can be counted in customers or in revenue, and it can be the customer's choice or an accident. Each kind calls for a different fix: a better product for the first, a better payment process for the last.
| Type | What it counts | Example |
|---|---|---|
| Customer churn | Customers who leave | 24 of 800 customers |
| Revenue churn | Recurring revenue lost | $1,500 of $40,000 a month |
| Voluntary churn | Customers who choose to cancel | A move to another product |
| Involuntary churn | Payments that fail and lapse | An expired card |
Learning why customers churn with Usertick
Start from the Cancellation survey template, which asks for the main reason, what could have been done better and whether you may follow up, or from Before you go, which also offers a pause instead of canceling and asks what would bring the customer back. Show it on your cancel page with a page rule on every plan, or when someone clicks the cancel button, on 1 survey on Free and on every survey from Starter.
Results draws the reasons as a donut with each one's share and count. Usertick reads what each customer writes for customer risk (healthy, at risk or about to leave) and for a churn signal, and the inbox shows both as signals beside the answers, so customers at risk stand out in any survey, well before a cancel page. The AI reading of each period can also report people about to leave.
On every plan, a workflow can post the answers read as at risk to Slack or Microsoft Teams, or create a HubSpot task for the person who owns the account.
Mistakes to avoid with churn
Small choices that keep the results useful.
- 01
Counting new customers in the rate
New sign-ups hide the customers you lost. Measure churn against the customers you had at the start.
- 02
Asking after they have left
An email a week later gets few answers and vague reasons. Ask in the cancel flow, before the final step.
- 03
Making the survey a hurdle
A long or required survey in the cancel flow frustrates people who have already decided. Keep it short and let them skip it.
- 04
Treating every reason the same
A missing feature and a failed card need different fixes. Group the reasons and work on the largest group first.
Frequently asked questions
It depends on your business: a monthly software subscription, a yearly contract and a shop all lose customers at very different rates. Compare your rate with your own past months and between your own plans or customer groups.
They are two views of the same customers. If 3% of the customers you started the month with leave, the other 97% are retained.
Watch for falling use, low scores and repeated complaints, which often come before a cancellation. Usertick marks the answers it reads as at risk or about to leave, in every survey, so you can reach those customers first.
Usually not. A short optional survey still shows the main reasons, and a required one makes leaving feel harder than it should.
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