The essentials
- Definition: churn, or attrition rate, is the share of customers or subscribers lost over a given period.
- Formula: churn = customers lost over the period / customers at the start of the period × 100. Revenue churn is calculated on revenue rather than on the number of customers.
- 2026 benchmarks: 3 to 7% a month for self-service software, 0.5 to 2% for B2B software under contract, 20 to 40% a year for a consumer subscription service.
- Impact: cutting churn by 5 points raises customer lifetime value by 20 to 40% and raises the acceptable acquisition cost by as much.
The aim of churn (attrition rate) measures the proportion of customers, subscribers or contracts lost over a period. It is the mirror image of retention: a monthly churn of 5% means a company loses a twentieth of its base every month and has to rebuild it before it can even grow. It matters most to subscription businesses (software, publishing, gyms, recurring services), but it also applies to businesses with regular repeat purchases, where it is measured by the absence of an order over a reference period.
The formulas
| Metric | Calculation | What it reveals |
|---|---|---|
| Customer churn | Customers lost / customers at start of period × 100 | The loss in volume |
| Revenue churn (gross) | Recurring revenue lost / recurring revenue at start × 100 | The loss in value, often different from customer churn |
| Net revenue churn | (Revenue lost minus revenue gained on existing customers) / revenue at start × 100 | Can be negative if upgrades outweigh departures |
| Retention | 100 minus churn | The same reality, stated the right way round |
| Average lifetime | 1 / monthly churn | A churn of 5% a month gives a lifetime of 20 months |
Customer churn and revenue churn diverge when departures concentrate on your smallest accounts or, conversely, on your largest. A customer churn of 8% with a revenue churn of 3% signals departures concentrated among small customers — a less serious situation than a customer churn of 3% paired with a revenue churn of 8%.
The 2026 benchmarks
| Business | Monthly churn | Annual churn |
|---|---|---|
| Self-service B2B software (small accounts) | 3 to 7% | 30 to 60% |
| B2B software on an annual contract | 0.5 to 2% | 6 to 20% |
| Consumer subscription service | 2 to 5% | 20 to 45% |
| Online publishing and media | 2 to 4% | 25 to 40% |
| E-commerce (repeat purchase within 12 months) | Not applicable | 60 to 80% not repeating |
| Recurring professional services (agency, accountant) | Not applicable | 10 to 25% |
The main causes
- A failure to get started: a customer who hasn't got their first result within the first thirty days almost always leaves; half of all churn is decided during onboarding.
- No perceived value: the service works but the customer can't see what it brings them, for want of a report, a review or a conversation.
- Price against the competition: a frequently stated cause, more rarely the real one; it often masks a lack of perceived value.
- Customer service: a badly handled incident weighs more than a technical outage.
- Change at the customer's end: your contact leaves, a reorganisation, the need ends; a cause outside your control, to isolate in your analysis.
- Involuntary churn: an expired card, a rejected payment; it accounts for 20 to 40% of total subscription churn and is fixed with automated retries.
The levers for bringing it down
- A structured onboarding path: first value obtained within days, with a defined objective that is checked.
- Warning signals: falling usage, no logins, an unresolved ticket; a risk score triggers contact before the departure.
- Regular proof of value: a monthly report, a quarterly review, results in figures; it is the same principle as reading a dashboard on the client side, described in connecting business objectives and marketing KPIs.
- Retrying failed payments: automated sequences and updating payment methods.
- Listening to those who leave: a short exit survey whose answers feed product fixes.
- Online loyalty: content, emails and a customer area that keep the relationship alive, described in building loyalty among your site's users.
Churn, LTV and acquisition cost
Churn drives customer lifetime value directly: at €100 of monthly revenue and 5% churn, a customer is worth an average of €2,000; at 3% churn, €3,300. The acceptable acquisition cost follows the same curve, which is why two companies in the same sector can sustain very different advertising budgets. The full calculation is set out in LTV in digital marketing, and acquisition cost in CAC: definition.
How GreenRed helps
Rather than juggling several tools, GreenRed's return on investment module brings these metrics together in a single dashboard, compares them over time and tells you which actions come first. You can try it free, with no card, from the Pricing.
Frequently asked questions
What is churn?
The attrition rate: the share of customers, subscribers or contracts lost over a period. It is calculated by dividing customers lost by customers present at the start of the period. Its mirror is the retention rate, equal to 100 minus churn.
What counts as a good churn rate?
It depends on the model: 0.5 to 2% a month for B2B software on an annual contract, 3 to 7% for self-service software sold to small accounts, 2 to 5% for a consumer subscription. The most useful comparison remains the company against itself, month after month.
What is the difference between customer churn and revenue churn?
Customer churn counts departures by number, revenue churn counts them by revenue lost. High customer churn with low revenue churn signals small accounts leaving; the reverse, and more serious, signals the loss of your most important customers.
How do you reduce churn?
By structuring onboarding so the customer gets a first result within days, by watching for signals of falling usage, by proving value regularly through a report or a review, by automatically retrying failed payments, and by asking the customers who leave why.