Inbound & Down

Question of the Day

Published November 06, 2019

What is churn?

  1. The percentage of employees who leave your company within a given year.
  2. The number of leads you lose during a sales cycle.
  3. The percentage of customers who end an engagement with your business.

The Answer is C.

Churn refers to the percentage of customers who ended the use of a company's product or service during a set period of time. -HubSpot

While it may seem like an intrinsically negative statistic, this is not always the case. It's quite possible for you to simply outgrow your customers, or to take them as far as you can with a particular arrangement. 

Businesses should expect to have a certain degree of churn, and often choose to build this into their business model. HubSpot provides a formula to calculate churn:

  1. Determine a time period.
  2. Determine the number of customers acquired during this time period. 
  3. Determine the number of customers lost or churned during this same interval. 
  4. Divide the number of lost customers by the number of acquired customers.
  5. Multiply that number by 100%.

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