Customer churn

What is the customer churn rate?

Customer churn rate is the percentage of customers who stop buying from or subscribing to your business over a specific period of time. It’s one of the most important metrics for ecommerce and subscription-based businesses because it reveals how well you’re retaining your customers.

So churn happens when a customer ends their relationship with your brand, by canceling a subscription, not returning to make a repeat purchase, or becoming inactive over time.

How to calculate customer churn?

Here’s the basic formula:

Churn Rate = (Customers Lost During a Period ÷ Total Customers at Start of Period) × 100

For example, if you started with 1,000 subscribers and lost 50 in a month, your churn rate is 5%.

How to reduce Customer Churn?

Here are some actionable tips to reduce customer churn:

• Help new customers get started quickly with guides, walkthroughs, or personal support.
• Monitor inactivity and reach out with helpful tips or offers before they disengage completely.
• Let customers pause, skip, or downgrade instead of canceling entirely.
• Collect feedback regularly and show customers you’re making improvements based on their input.
• Surprise long-time users with exclusive perks, discounts, or early access to new products.
• Use customer data to tailor product suggestions, emails, and offers based on their preferences.
• Stay in touch with helpful content, not just promos. Keep them engaged and valued over time.

Example of customer churn

If a customer cancels their monthly subscription to a snack box after 2 months, that counts as customer churn, especially if they don’t return within a reasonable timeframe./p>

Driftcharge Tip

Track churn regularly and dig into the reasons why customers leave. Use feedback, onboarding improvements, and loyalty programs to reduce churn and increase retention.

Ganesh Pawar

• 

Ganesh Pawar is the founder of Driftcharge, a subscription management app designed to help Shopify merchants streamline and scale their subscription businesses. With a deep focus on solving real-world pain points—like legacy account page support, flexible subscription options, and advanced analytics—Ganesh is passionate about building tools that drive growth and retention.