Churn rate, sometimes called attrition rate, is a calculation of customer turnover. It allows businesses that rely on subscribers, such as magazines and mobile phone carriers, to measure performance. The churn rate is normally calculated at the beginning of a business period, and throughout respective periods. To calculate churn rate, a business must determine how many customers discontinued services during a specific period of time.
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Figure out the total number of customers that discontinued the services provided by the business. This includes cancellations by customers and the business itself.
Figure out the total number of customers that have subscribed or contracted to the business.
Divide the number of discontinued services by the number of total customers to compute the churn rate.
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