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Churn (aka cancellation rate) is the percentage of customers or subscribers who cancel or select not to renew their subscriptions during a given time period.
So, for instance, if you have 5 customers cancel and you originally signed 200 customers, your churn rate would be 2.5%.
5/200 = .025 (2.5%)
Churn rate is a significant metric for SaaS companies and companies whose customers pay on a recurring basis. Regardless of your monthly revenue, if your average customer does not stick around long enough for you to at least break even on your customer acquisition costs, you’re in trouble.
