Churn Rate

    The churn rate, also called as attrition rate, is when consumers discontinue doing any transactions with a company after a certain amount of time has passed. The number of customers that cancel or do not renew a subscription is also known as churn. The higher your churn rate, the fewer clients are willing to buy from you.

    Understanding client churn is critical for assessing the success of your marketing activities and overall customer happiness. It’s also easier and less expensive to keep existing clients rather than acquire new ones. Many organizations must understand where, how, and why their consumers may be churning due to the popularity of subscription business models.

    Take all of your monthly recurring revenue (MRR) at the starting of the month and divide it by the regular payment you lost that month — minus any upgrades or additional income from existing customers — to get the percentage of churned revenue. You don’t want to count any new sales in the month since you’re figuring out how much total income you lost. You have gained money by generating new revenue from existing clients.

    Join Our Community

    and stay up-to-date with everything going on in the Akrivia HCM