Churn is a metric used by many companies to measure customer satisfaction. In the case of a subscription, churn is the percentage of people who cancel or do not renew their subscriptions after a certain time frame. This metric can be helpful for a company that wants to understand how satisfied customers are with a product or service.
Churn is a measure of how often users stop using a product. When a product is sold via subscription, there can be a monthly, quarterly, or annual churn rate. Churn is often evaluated for a specific period of time, but it’s not limited to that time frame.
It’s not uncommon for companies to experience a decline in sales or revenue as a result of customer cancellations.
Example of Churn
For example, the popular video game Fortnite has seen a decline in active players, which has impacted its overall user base and therefore its revenue.
Think about the last time you went to a restaurant. You probably made a reservation and sat down, and when your table was ready, you got up and left. Chances are you didn’t go back to that restaurant.