Churn rate

Sara Heegaard March 3, 20222 minute read

Sara is a copywriter focused on lifting up Recharge's merchants, partners, and their customers. Before Recharge, her past lives included writing and editing at four different subscription... Full bio

What is churn rate?

Churn rate (also referred to as attrition rate) is a key metric for subscription businesses that calculates the percentage of customers who cancel their subscription (or “churn out”) over a set period of time. For example, annual churn rate calculates the percentage of customers who churn over a year period. Churn rate is a crucial tool for assessing customer satisfaction and planning for company growth. For example, if your customers churn out of your business soon after taking advantage of a discount, it’s worth taking another look at your marketing efforts and retention strategies to keep your customer base engaged and reduce churn. 

Strategies for reducing customer churn rate

There are many best practices for businesses to boost customer retention rate and customer lifetime value, reducing churn. Offering your subscribers as much flexibility as possible—in terms of product offerings, communication, and checkout options—can help your brand shift to a relational commerce model, increasing active engagement and reducing the possibility of a churn event. Clear communication to accurately set customer expectations is also crucial. Finally, empowering your customers to manage their own subscriptions and accounts can build trust in your brand and reduce churn rates.