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Churn Rate

By Dan Kurtz 1 min read

Churn rate is the percentage of customers who cancel or fail to renew in a given period. Monthly churn is common in SMB businesses; annual churn is more relevant for enterprise contracts.

A 5% monthly churn rate sounds small but compounds to nearly 46% annual churn. A business losing that share of its customer base every year has to grow fast just to stand still. Retention is a growth lever, not a defensive metric.

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