Business Metrics

What is Churn Rate?

Definition

The percentage of subscribers who cancel their subscription during a given time period, typically measured monthly or annually.

Understanding Churn Rate

Churn rate is one of the most important metrics for subscription businesses. It measures how many customers leave. A monthly churn rate of 5% means 5% of subscribers cancel each month.

Good SaaS churn rates are typically 3-5% monthly for B2C and under 2% monthly for B2B. High churn indicates dissatisfaction, poor onboarding, or strong competition. Companies combat churn through better onboarding, engagement features, loyalty programs, and improved customer support.

For consumers, understanding churn helps evaluate service stability.

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