Small Business Toolkit

Churn Rate Calculator

Churn Rate Calculator

Sometimes things don’t go as planned, and we lose customers or subscribers. Wouldn’t it be convenient if we could measure the rate at which we lose customers?

Well that’s what Churn rate is for.

Calculate your Churn Rate


What is Churn Rate

So what is Churn rate? Well simply put churn rate is the number of customers or subscribers you’ve lost from the beginning of a period to the end of a period.

It’s pretty much what it’s name says.

Contrary to some people’s beliefs, churn rate is a very important metric for business, both with a subscription model and those without, such as, ecommerce businesses.

Churn rate is sometimes seen as more complicated to work out for ecommerce businesses, as churn tends to focus on recurring customers. However it can still be a useful metric alongside conversion rate and repeat purchase rate.

For subscription model business’ the churn rate is an essential KPI, telling you how useful customers are finding your subscription (do they only sign up for a month, after a certain event or release do you notice a lot of customers leaving?).

This gives the business the chance to work on relations with customers on touch points before purchasing a subscription, during the purchasing process and after they’ve subscribed.

The business is able to meet and go beyond customer satisfactions during the customer’s relationship with them.

With potentially longer touch points they don’t need to rely on the customer coming back, because the customer is already there, they just need to keep them satisfied so they don’t unsubscribe.

How to work out Churn Rate

So you’ve got your the run down of what Churn rate is, we can now start looking at how to work it out.

Churn rate isn’t super hard but to work out, but it is easier with a calculator.

The Churn rate formula is quite simple:

Number of customers who churned in period /Total number of customers at start of period.

Why is Churn Rate so Important

Customer retention is very closely related to business growth. If you’re retaining your customers you’re also growing your business.

One thing to always remember when you’re trying to grow your business or generate more revenue is that in the long run it is a lot cheaper to retain current customers than try and acquire new ones.

Let’s look at it this way, if you had no idea what your churn rate was you’d have no idea if your business has a potential growth.

To summarise, churn rate is one metric that gives you a good understanding on whether your customers are happy or not, and how much potential your business has to grow.

How to reduce Churn Rate

Reducing your churn rate is all about reducing the amount of customers cutting ties with you. The best way to do this is by increasing your customer satisfaction.

Here’s a few ways you can increase your customer satisfaction:

Personalised Email Marketing

One way to increase customer satisfaction is to be personal, sometimes this is difficult, but if you’re sending emails to customers adding a touch of empathy and useful content or information can go a long way.

A prime example of this is Amazon, Amazon send emails to their users that tailor to their exact needs.

They’ll recommend relevant and useful products that are on offer based on what you’re interested in.

Not only does this increase their customer satisfaction it helps with repeat purchases.


One thing people love is convenience, if you’re convenient enough you can even become a one stop shop.

Take Amazon again for example, Amazon is convenient and is ever growing in convenience with its venture into home groceries.

If you can follow suit and cater to your customers needs your customers will be a lot more satisfied which would also lead to a decrease in churn rate and churned customers.


When it comes to reducing customer churn transparency can make a huge difference. Being transparent is important more so with ecommerce businesses than physical stores.

This is because 73% of online shoppers thought online shopping was riskier than offline shopping.

Online shoppers are already pretty angsty when it comes to ordering online and delivery dates.

So make sure you’re transparent with them, let them know exactly when your orders will arrive, keep them up to date and don’t lie about delays because that will only make things worse.

If you walk through the process with customers who may have complications with their orders it will increase their perception of your business.

This will lead to a loyal customer and in turn a reduced churn rate.

Exceed customer expectation

From the first moment of contact between our customers, we have the power to create wonderful experience.

Good etiquette and manners are a must, but what we sometimes have trouble interpreting is the customer’s expectations.

So what do customers expect? Well here are a few things that all customers expect, these are essential:

So how do we go beyond these expectations and over deliver to our customers? Well to do this we first need to look at our touch points.

A touch point is basically key moments between the customer and our business from the first interaction. This can be anything between pre purchase and post purchase.

Once you’ve got your touch points mapped out you can look at focusing on increasing expectations. Try and focus on one touch point.

If you try and beat expectations on as many touch points as possible you’re probably going to spend too much time and money.

Focus on one aspect that is or isn’t working and make it pristine.

A great example of this is Laura Ashley who focus on exceeding customer expectations in the post purchase touch point.

When you purchase a bedding from them two days before your bedding arrives you get a thank you letter and a pair of cozy socks.


Remember the churn rate is the rate at which customers are cutting ties with your business, To keep your churn rate lower you need to essentially keep your customers happy.
Whether you’re an ecommerce website or a subscription based business you need to look at your churn rate.