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Start Calculating Customer Churn Correctly

Churn-v2

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In 2004, Netflix was sued by its shareholders over its reported churn rates. The shareholders argued that Netflix “[used] an improper calculation of the rate that produced an artificially low churn rate.” A judge threw out the case, ruling that there is no single industry-wide definition of churn rate.

Clearly, churn rate is a critical metric for any subscription business. But there are also a variety of opinions about how to calculate it.


In this guide we'll explore:

  • What is Customer Churn
    What does churn mean for a subscription business?
  • How to Calculate Churn
    What are the common formulas used to calculate churn.
  • How to Avoid Mistakes
    Avoid common pitfalls in your churn calculation with these easy tips.

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Recurly has been a key advantage for us and an important contributor to our recent success.

Bartosz Olchowka, Head of Development

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Recurly has allowed us to shift quite a few resources away from payments...

Joseph Wecker, Sr. Engineer

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