Churn Rate

The percentage of customers or subscribers who discontinue their relationship with a product or service during a given period. Churn can be voluntary — the customer actively cancels — or involuntary, such as when a payment method expires. It can also be silent, where the user simply stops engaging without formally closing the account. Churn rate is the inverse of retention rate and is a critical health metric for any subscription business. Reducing churn is typically more cost-effective than acquiring new customers, as acquisition costs are substantially higher than retention investments.

Example: A streaming service that offers a pause option during cancellation may reduce voluntary churn among subscribers who are only temporarily unable to use the service.