Attrition Rate
Attrition rate (also known as churn rate) is the percentage of customers who stop doing business with a company over a given time period. It is one of the most important metrics for any subscription or membership-based business.
How to Calculate Attrition Rate
Attrition Rate = (Customers Lost During Period ÷ Customers at Start of Period) × 100
For example, if you start the month with 500 members and lose 25, your monthly attrition rate is 5%.
Why Attrition Rate Matters
High attrition directly impacts revenue and growth. Acquiring a new customer costs 5-25x more than retaining an existing one. Even a small reduction in attrition — say from 5% to 4% monthly — can dramatically increase your customer lifetime value and annual revenue.
How to Reduce Attrition
- Identify at-risk customers early using engagement data
- Automate win-back campaigns before members fully lapse
- Improve onboarding to build habits in the first 30 days
- Use behavioral triggers to re-engage inactive customers
- Collect and act on feedback to fix experience issues
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