Retention vs Acquisition
Acquisition is visible and feels like progress. Retention decides whether any of it accumulates. Most early teams work on the wrong one.
Beginner7 min readDaksh BathlaDEFINITIONBusiness
Churn
The rate at which customers stop paying you, over a given period. Usually stated monthly or annually, as a percentage of the customers you had at the start.
EXAMPLE
You start the month with 200 customers and 10 cancel. Monthly churn is 5%.
WHY IT MATTERS
Churn sets the ceiling on your growth. At 5% monthly churn, the average customer stays about twenty months — and you have to replace a twentieth of the business every month before growing at all.