The percentage of customers who stop buying.
NOIR & BLANCO COMMUNITY
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Churn rate is the percentage of customers who stop doing business with a company during a specific period. It is commonly used to measure customer retention and identify how many customers are being lost over time.
A common formula is:
Churn Rate = (Customers Lost During the Period ÷ Customers at the Start of the Period) × 100
For example, if a B2B ecommerce company starts a month with 1,000 customers and 50 customers stop purchasing or cancel their accounts during that month, the churn rate would be 5%.
Churn rate can help businesses:
In B2B, churn may be measured based on account cancellations, contract termination, or customers becoming inactive, depending on the business model.
A lower churn rate generally means fewer customers are leaving, but the appropriate rate depends heavily on the industry, business model, customer lifecycle, and measurement period.