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Churn Rate

Churn rate indicates how many of your customers stop paying you and no longer do business with you over a certain period of time. It's calculated by dividing the number of customers who stopped doing business with your company during a certain time period by the total number of customers in the same period. At first glance, “churn rate” sounds straightforward enough. But the reasons behind its increase are not as simple when dissected and analyzed. Understanding why customers are leaving can help you determine how to stop this from happening altogether.