Churn rate

The percentage of customers who have discontinued using a product or service over a given period of time. This KPI measures the effectiveness of the Customer Success Team in retaining customers.

For businesses, churn rate is a critical metric for measuring customer retention. It refers to the percentage of customers who have stopped using your product or service over a given period of time. The customer churn rate is a key performance indicator (KPI) for the customer success team as it reflects how effective they are in retaining customers.

If a company’s churn rate is high, it means that they are losing more customers than they are acquiring. This is not only an indication of a problem but can also lead to a decline in revenue. Understanding the churn rate can provide meaningful insights that can help businesses improve their customer success efforts.

In this article, we will explore the meaning of churn rate, why it is important, and how you can improve on this key performance indicator.

Crunching the Numbers: Understanding Churn Rate as a Key Performance Indicator

Churn rate is a percentage of customers who have discontinued using a product or service over a given period of time. This can be calculated by dividing the number of customers who have left, by the total number of customers.

For example, if a business had 100 customers at the beginning of the month and lost 10 customers during the month, the churn rate would be 10% (10/100).

Churn rate is an essential KPI for businesses as it provides insights into customer retention. By tracking the churn rate, businesses can identify how well they are retaining customers and how successful their customer success efforts are. A high churn rate can indicate a problem, while a low churn rate means that the business is doing well in retaining customers.

Retaining Customers: Leveraging Insights from Churn Rate to Improve Customer Success Efforts

Understanding the churn rate is only the first step in improving customer success efforts. To reduce churn rate, it is essential to identify the root causes of customer churn and take actions to address them.

One way to do this is by analyzing customer feedback. Conducting regular customer surveys can provide insights into customer satisfaction levels and what areas need improvement. A company can also analyze customer complaints and feedback to identify common issues and address them.

Another approach is to provide proactive customer support. By monitoring customer behavior, businesses can identify potential issues and take action before the customer decides to leave. For example, if a customer has not used a particular feature of the product, the customer success team can reach out to the customer and provide training or support to encourage usage.

Offering incentives or rewards for customer loyalty can also be an effective way to reduce churn rate. For example, offering discounts or free trials to loyal customers can encourage them to continue using the product or service.

Finally, it is crucial to measure the impact of customer success efforts by tracking metrics such as customer satisfaction and retention rates. This can provide insights into what is working and what areas need improvement.


In conclusion, churn rate is a critical KPI for businesses to track. It reflects how effective a company’s customer success team is in retaining customers. By understanding the churn rate, businesses can identify root causes of customer churn and take action to improve customer success efforts.

Analyzing customer feedback, providing proactive customer support, offering rewards for loyalty, and tracking metrics are effective ways to reduce churn rate. Improving customer success efforts can lead to higher customer satisfaction rates, increased revenue, and ultimately, a successful business.