Churn rate formula
Churn rate = users lost during the period ÷ users at the start of the period × 100
Only count users who were there at the start; new users who joined during the period don't belong in either number.
Monthly, yearly and lifetime
- Monthly churn from a longer period: 1 − (1 − churn)^(1 ÷ months).
- Yearly churn from monthly churn: 1 − (1 − monthly churn)^12. It compounds, so 5% a month is about 46% a year, not 60%.
- Average customer lifetime ≈ 1 ÷ monthly churn. 5% monthly churn means subscribers stay about 20 months on average, which feeds straight into LTV.
Example
A subscription app starts the month with 5,000 subscribers and loses 400: churn is 400 ÷ 5,000 = 8% per month, about 63% a year, and the average subscriber stays 12.5 months.
Where churn shows up first
Users who are about to leave often say why in their app reviews: a price increase, a missing feature, a bug after an update. More on churn in the glossary: churn rate.