Churn

Also referred to as “churn rate,” this is a measurement of your customers’ non-renewals, cancellations, and discontinued payments for previously agreed-to services or products. It’s important to know your churn rate to understand your buyers’ behaviors and identify shortcomings in your sales approach or service that might otherwise keep your customers on the books.

To calculate your churn, take the number of customers lost during a specific period and divide it by the total number of customers you had at the start of that time period. (Don’t include new sales during that period.) As an example, if you had 50 customers at the beginning of September and you had 45 customers at the beginning of October, your churn rate would be 10 percent (50 – 45 = 5 / 50 = 10%).