Skip to main content

Customer attrition rate

Definition

Customer attrition rate is the percentage of customers who do not renew their subscription to a product or service. Customer attrition rate is more commonly referred to as a businesses churn rate.

It's important to know this number because it can tell you whether or not you're actually retaining your customers and how many of them are churning.

How is Customer attrition rate calculated?

A company's customer attrition rate is calculated by dividing the number of customers lost during a period of time by the total number of customers at the beginning of that period.

The formula for calculating Customer attrition rate is:

Customer attrition rate = Customers who cancel (During the time period) ÷ Total number of customers (At the start of the time period)

Example:

Let's say you have a monthly subscription-based product and you have 100 customers. At the end of the first month, 20 of those customers decide they no longer want the product and cancel their subscriptions.

This means that 20% of your customers are leaving each month, which is referred to as "churn." The customer attrition rate or churn rate for this particular business would be 20%.

Why is Customer attrition rate important to measure?

The customer attrition rate is important because it is a measure of how well a company is retaining its customers. A high customer attrition rate can be a sign that a company is losing customers faster than it is gaining them, which is not sustainable in the long run.

Frequently asked questions

Have another question? Reach out to our retention expert team.

What is a good customer attrition rate?
A good customer attrition rate depends on the industry. For example, in the SaaS industry, a customer attrition rate of less than 5% is considered good.
What are the causes of high customer attrition rate?
There are many causes of high customer attrition rate, but some common ones are poor customer service, high prices, and a lack of innovation.
How can I reduce my customer attrition rate?
There are several ways to reduce customer attrition rate, such as improving customer service, offering discounts or loyalty programs, and constantly innovating.

Related terms

Get started today...

  • Step 1

    Create your free Upzelo account and connect your subscription billing data in just a matter of minutes. Invite teammates to help connect accounts with ease.

    Create account button on an example signup screen
  • Step 2

    Obtain real-time subscription analytics, insights and benchmarks. Set up alerts to notify you via email or Slack when a particular event takes place.

    Subscription analytics overview with KPIs for MRR, Active customers and a partially hidden bar chart showing breakdown of MRR
  • Step 3

    Segment your customers into audiences, create surveys, build offers and deliver fully-branded customer flow experiences that increase retention.

    Example of a cancellation flow with Audience at the top, leading to a Bi-monthly billing survey, 10% off next bill and finishing with a Confirmation message