Churn rate

Churn rate is the percentage of customers or subscribers who stop buying, cancel or stop using a product during a period, out of those you had at the start of it. Measured on the same group of customers over the same period, churn rate equals 100% minus retention rate.

What is churn rate?

What counts as leaving has to be defined first, because it differs by business model:

• Subscriptions (paid apps, software, gym plans): the customer cancels or does not renew. Stripe treats a subscriber as churned when all of their subscriptions are canceled or marked as unpaid.
• Ecommerce and retail: there is no cancel button, so the business sets its own threshold, for example no purchase in 180 days.
• Free apps: GA4 has a churn probability metric, the probability that a user who was active in the last 7 days will not be active in the next 7 days (Google Analytics Help, Predictive metrics, accessed October 2026).

Churn rate formula

Churn rate = Customers lost during the period / Customers at the start of the period × 100%

Stripe uses a variant for subscriptions: subscribers churned in the past 30 days divided by active subscribers 30 days ago plus new subscribers in those 30 days. Stripe’s example: 1,000 subscribers at the start of the month, 100 added and 100 churned during the month, so churn is 100 / 1,100 = 9.1% (Stripe Docs, Billing analytics, accessed October 2026). The basic formula above gives 10% on the same numbers. When you compare figures, ask which denominator the other side used.

Churn rate vs retention rate

Retention rate measures the share of customers who stay; churn rate measures the share who leave. For the same cohort and period, the two add up to 100%: 90% monthly retention means 10% monthly churn.

Over several periods you cannot multiply one month’s churn by the number of months. Stripe’s illustration: at 10% churn a month, what remains is 90% after month 1, 81% after month 2, 73% after month 3 and 59% after month 5. You lose 41% over 5 months, not 50%, because each month you lose 10% of what is left.

Example: churn and lifetime value (hypothetical)

An English learning app sells a single plan at VND 199,000 a month. On October 1 it has 5,000 subscribers, and 400 cancel during the month.

• October churn rate = 400 / 5,000 = 8%.
• Recurring revenue lost = 400 × 199,000 = VND 79.6 million a month.
• Stripe estimates subscriber lifetime value as average revenue per user (ARPU) divided by churn rate: 199,000 / 8% = about VND 2.49 million.

Cut churn to 6% and lifetime value (LTV) rises to about VND 3.32 million. At the same customer acquisition cost (CAC), each subscriber brings in about VND 830,000 more before operating costs.

Where to start reducing churn

Separate voluntary churn (the customer clicks cancel) from involuntary churn (expired card, failed payment). Stripe’s Smart Retries automatically retry failed payments to prevent this second kind (Stripe Docs, Revenue recovery, accessed October 2026).

Break churn down by acquisition source, plan and sign-up month with customer segmentation. An ad channel that brings cheap customers with high churn can cost more than a channel with a higher CAC.

Measure revenue too. Stripe calculates churned revenue as the recurring revenue of customers who canceled plus the drop from customers who downgraded. Losing 10 customers on a small plan is very different from losing 10 on a large one.

Frequently asked questions

What is a high churn rate?

There is no universal threshold. A monthly plan gives customers 12 chances a year to cancel; an annual plan gives them 1. Comparing your own churn month over month, by customer group, is more useful than a number from the internet.

How do you calculate churn for an online shop without subscriptions?

Set a no-purchase threshold based on your real buying cycle: perhaps 90 days for fast-moving consumer goods, 1 to 2 years for furniture. Customers past the threshold count as churned.

Does a loyalty program reduce churn?

It can, but you need a control group to measure it. See loyalty program.

If you need to connect churn data with ad spend to see which channels bring customers who stay, contact Adtek.