Difference between Churn Rate and Growth Rate
Characteristic | Churn rate | Growth rate |
---|---|---|
Measures | Loss of customers | Gain of customers |
Calculated by | Number of customers who churned / Total number of customers at the beginning of the period | Net increase in customers / Total number of customers at the beginning of the period |
Impact on company growth | Negative | Positive |
What is Churn in Product Management? Calculation, and Its Impact on Business
Churn in Product Management is a critical metric for businesses, particularly for subscription-based services, as it directly impacts revenue and growth. in the context of business, It refers to the rate at which customers or subscribers stop doing business with a company or cease their subscription to a service over a specific period. Understanding churn is essential for businesses to retain customers and maintain sustainable growth.
Churn refers to the percentage of customers or subscribers who discontinue their relationship with a company within a specific time frame, typically a month or a year.
Table of Content
- What is Churn?
- There are typically two types of churn
- Formula for Churn Rate
- Impact of Churn on the Product Metrics
- What Product Managers Need to Know About Churn
- Difference between Churn Rate and Growth Rate
- Why Do Customers Churn?
- What does churning mean in Business?
- Pros and Cons of Churn Rate
- Example of Churn
- Steps to Reduce Churn
- What do we mean by High Churn Rate?
- What is Netflix’s Churn Rate?
- FAQs On Churn
- Conclusion