Churn Rate

Churn rate is the percentage of customers — or recurring revenue — lost over a given period, calculated as customers lost divided by customers at the start of the period. It is the inverse of retention and the single biggest drag on LTV: high churn forces acquisition to keep refilling a leaking bucket. In subscription and SaaS models, the distinction between customer churn and revenue churn matters, since losing a few large accounts can hurt more than losing many small ones. Lowering churn is almost always cheaper than raising acquisition to offset it.