Churn rate

Learn the definition and meaning of Churn rate along with an example

Churn rate
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Definition

With respect to time, every product acquires new users & even loses a certain number of consumers. The churn rate is the measure of the rate at which the number of paying customers declines.

How is it useful?

Churn rate helps in determining what percentage of users are not making repeat purchases.

Example

Netflix is recognized as having one of the lowest churn rates in the OTT space. At the end of the year 2021, Netflix had ~208 million paid subscribers.
Now each month the number of its users who canceled their subscription with Netflix is going to be called as churn users. And the percentage of this (for Netflix it’s in the range of 2.3-2.5%) is known as the churn rate.
When you switch & change the store you usually buy groceries from, you become a churned user for that store.
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