What churn rate is: the rate at which you lose your customers, so, the percentage of customers who leave within a certain period of time.
What churn rate is not: retention rate. That’s actually the opposite, so, retention rate is 100% minus your churn rate.
Why we care about churn rate: Your churn rate can help you determine your lifetime value, which, in turn, can help you figure out what your cost per online acquisition should be. It’s also a helpful metric to track if you’re hoping to implement programs to help retain your customers for a longer period of time.
This post is part of an ongoing Clickipedia series, defining all the terms you need to know for conversion rate optimization. Keep checking back each week to learn more, and don’t forget to download the whole series.