Churn is a percentage calculated by dividing the number of customers that cancel, by the total number of your customers. This number will help reveal the health of your subscriber base. A low churn number is good. A high churn number means your customers are cancelling.

The Math:

Cancelled / Total Subscribers

Example:

If you have 100 active paying subscribers and this month 2 people cancel their subscription, your churn for this month would be 2%.

What It Means:

You want as low of a churn rate as possible. A high churn rate means a big number of your customers are leaving each month. 

What to Change:

If your churn rate is high, you may want to consider reevaluating your product offering. Either find creative ways to add more value, or reduce the price in order to keep customers longer. There isn’t a one-size-fits-all answer to addressing churn, but if you have a subscription business this stat is the most important statistic to measure the health of your business.