What is Churn Rate?

Churn Rate is the percentage of users who stop using your app (or cancel their subscription) over a given period of time.

Imagine if you start the month with 1,000 subscribers and 100 cancel, your churn rate for that month is 10%. It’s the inverse of retention and tells you how much of your user base you're losing.

How does it work?

The basic formula is:

Churn Rate = (Users lost during a period ÷ Total users at the start of the period) × 100

You can calculate churn across:

• Subscribers (subscription cancellations)

• Users (uninstalls or inactivity)

• Revenue (monthly recurring revenue lost)

Churn can also be segmented by cohort, plan type, platform, or even acquisition source. For example, users from TikTok ads might churn faster than those from organic search, and that insight can guide future budget decisions.

Some teams track voluntary churn (user chooses to cancel) vs. involuntary churn (payment failed), as each has different solutions.

Why it matters

Churn Rate is a key signal of product-market fit and customer satisfaction. If users are leaving quickly, something’s broken, whether it’s onboarding, value delivery, pricing, or product quality.

High churn limits growth. Even with strong acquisition, you’re constantly refilling a leaky bucket.

Low churn, on the other hand, means you’re retaining value, and LTV goes up. That gives you more room to invest in paid acquisition and compete over the long term.

Reducing churn isn’t about hacks. It’s about delivering consistent value, fast time-to-value, and a product worth sticking with.