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What is churn?

What is churn?

Churn measures how many customers stop using a product or service during a specific time period. This essential business metric helps companies understand why customers leave and how to keep them longer. By tracking churn, businesses can spot problems with their product, service quality, or market fit early, before losing significant revenue. When many customers leave quickly, it often points to specific problems: the product might not meet customer needs, the service quality could be low, or the product might not solve the right market problems. This is especially important for subscription businesses, where customer loyalty directly affects monthly income.

To reduce churn, businesses first need to understand why customers leave. They do this by gathering feedback directly from customers, analyzing how people use their product, and studying responses from exit surveys.

Pro Tip: Start by calculating your churn rate monthly to track how effectively you are retaining customers.

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