The percentage of customers who stop purchasing over a specific period.

What it Measures ?

How many customers we lost.

Relevant StakeHolders 

Customer Success, Marketing Team

In-depth Use Case / Real-world Example

Churn Rate reflects the health of your customer base. For a manufacturing firm that supplies packaging materials to 1,000 clients annually, if 80 clients don’t reorder or switch vendors the next year, the churn rate is (80 ÷ 1,000) × 100 = 8%. Monitoring churn is important for maintaining steady revenue streams, especially when customer acquisition costs are high. Reasons for churn in manufacturing might include poor customer service, better pricing from competitors, or quality issues. Understanding this KPI allows sales and account management teams to proactively engage with at-risk clients, resolve issues early, and strengthen loyalty programs. Reducing churn leads to higher lifetime value and increases profitability.