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How to calculate churn rate (member churn)

Ronny Christensen avatar
Written by Ronny Christensen
Updated this week

📌 Method: MemberChurn

This article explains how we calculate how many members leave the system each month.

How is churn calculated?

  1. Finds the number of members at the beginning of the month

  2. Finds the number of members who quit during the month

  3. Calculates churn-rate Churn-rate=(Number of members who leftNumber of members at the beginning of the month)×100\text{Churn-rate} = \left( \frac{\text{Number of members who left}}{\text{Number of members at the beginning of the month}} \right) \times 100Churn-rate=(Number of members at the beginning of the monthNumber of members who left)×100

  4. Shows churn trends

    • We see how the churn rate changes over time.


Example calculation

We will calculate the churn rate for the month of March.

Month start

New members

Terminated members

Month-end

200

+30

-40

190

  1. We calculate churn rate:

    40200×100=20% churn-rate\frac{40}{200} \times 100 = 20\% \text{ churn-rate}20040×100=20% churn-rate

  2. If we do this for several months, we can identify trends.


Why is this important?

A high churn rate can mean that many members leave the platform, which can be a sign of dissatisfaction or lack of value in the product. It helps businesses take corrective actions to improve retention.

💡 Result: An overview of the churn rate per month, as well as the average churn rate for the period.

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