Analysis
Churn rate
Also called attrition.
Churn rate is the share of a starting group that leaves in a period. For subscriptions it counts cancellations; for sites it can count people who never return.
How it is measured
Take the customers or visitors at the start of the period as the denominator. Count how many of them were gone by the end. New joiners during the period do not enter the denominator, and the period needs to be stated.
Choose what leaving means. A cancelled plan is clear. A visitor who has not been back for 60 days is a rule you pick. Keep the rule fixed or churn will move because of the rule.
Worked example
A video-course platform starts April with 2,340 paying members. By April 30, 117 have cancelled and 260 new members have joined. Churn for April is 117 divided by 2,340, or 5.0 percent.
Using the end-of-month base of 2,483 would give 4.7 percent and hide that the starting group lost one in twenty. The platform reports the starting-base figure and also splits it by plan, where the annual plan sits at 1.1 percent.
How it differs
Churn rate counts who left. Retention rate counts who stayed. They add to 100 percent over the same cohort and window, so quoting both is redundant unless the audience prefers one.
Common errors
Putting new customers in the denominator. Mixing monthly and annual plans. Counting pauses as churn or ignoring them. Comparing months of different length. Quoting churn without the period.
In practice
Calculate it per cohort and per plan, not one blended number. Read the cancellation reasons next to it. Pick a leaving rule and write it down before the next quarterly review.