What is Churn Rate?
Churn rate is the percentage of customers who cancel their subscription or stop using a product within a given time period. If you start a month with 200 customers and 10 leave, your monthly churn rate is 5%.
Churn comes in two flavors: customer churn (the number of accounts lost) and revenue churn (the dollar value lost, which can differ when larger accounts leave). Tracking both matters, because losing a few big customers can hurt far more than losing many small ones.
High churn quietly undermines everything. A business adding 10% new customers a month while losing 8% to churn is barely growing, no matter how good its acquisition looks on the surface.
Why it matters
Churn is the leak in the bucket. You can pour acquisition effort in the top, but if customers drain out the bottom, growth stalls and CAC is wasted.
Because reducing churn improves LTV and makes every acquisition channel more profitable, cutting churn is often the cheapest way to grow — no new traffic required.
How Distro helps
Distro helps you attract better-fit customers in the first place by targeting the right buyer persona and channels, reducing the mismatch that drives early churn. See your buyer profile in your free growth report.
Related terms
Monthly Recurring Revenue (MRR)
Monthly recurring revenue is the predictable total revenue a subscription business earns each month from all active subscribers.
Lifetime Value (LTV)
Lifetime value is the total revenue a business expects to earn from a single customer over the entire duration of their relationship.