Churn

Churn is the share of your customers who stop paying in a given period. Five per cent monthly churn means that of every hundred people paying you in January, ninety-five are still paying in February — and that you need five new ones just to stand still.

The reason churn deserves more attention than almost any other number is that it compounds silently. At five per cent monthly, half your customer base is gone inside fourteen months. Growth hides this: while new sign-ups outrun cancellations, the top-line number keeps rising and nothing feels wrong. The month acquisition slows — a quiet summer, a channel that stops working, one competitor undercutting you — the same churn that was invisible becomes the whole story.

There are two churns worth separating. Involuntary churn is a failed card or an expired subscription: a payments problem, usually fixable in an afternoon, and typically a fifth to a third of the total. Voluntary churn is someone deciding you are not worth the money any more, which is a product or a positioning problem and takes months. Businesses regularly attack the second while ignoring the first, because the first is boring.

A concrete case: a membership with 400 paying members and 6% monthly churn loses 24 people a month. Fixing failed payments alone might recover eight of them — the same effect as a decent month of new sign-ups, for a fraction of the effort, and it arrives immediately rather than in the next quarter.