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What is customer churn and how is it measured?

Churn is the rate at which customers stop buying or cancel over a given period. It is usually calculated as customers lost during the period divided by customers at the start. For subscriptions the definition is clear, while for retail or one-off purchases you must define churn as, for example, no purchase in 180 days.

The definition drives everything else, so agree it before building anything. Choose the time window and the event that counts as leaving.

Watch out for:

Cohort tables, grouping customers by sign-up month, are a simple and honest way to view it.

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Published by Zansa · Last updated 2026-11-06 · Category: Forecasting and data science