Churn rate

What is churn rate?

Churn rate is the share of customers or subscribers who stop buying or cancel their subscription during a given period. It is usually calculated as customers lost divided by the number of customers at the start of the period, times 100. Churn is the direct inverse of retention rate: for the same cohort the two figures sum to exactly 100%. Beyond customer churn, teams often track revenue churn (MRR churn), which weights customers by value — losing a few large subscribers can hurt revenue more than many small cancellations, and expansion revenue can even push it negative.

Why does churn rate matter?

Churn determines how long a customer stays, and therefore their customer lifetime value. Retaining an existing customer is usually far cheaper than acquiring a new one, so low churn improves both the payback on your customer acquisition cost and your overall profit. A store with high churn has to keep buying new customers just to stand still.

Common use cases

• Subscription boxes and repeat orders. Track monthly churn to see how many subscribers cancel after, say, the 1st, 2nd, and 3rd delivery.
• Revenue churn vs. customer churn. Separate the two to spot whether it is high-value customers who are leaving.
• Cohort analysis. Compare churn for customers acquired via a campaign, a discount, or at full price.
• Non-subscription stores. Without a cancel event, churn is often estimated via repeat purchase rate or inactivity beyond a fixed window (e.g. 365 days).

Shopify perspective

Shopify does not report subscription churn natively. The first-party Shopify Subscriptions app handles the subscriptions themselves, but deeper churn and MRR reporting typically comes from third-party apps like Recharge or Appstle — or from custom analytics. For ordinary non-subscription stores, you can approximate churn in Shopify analytics using the share of returning customers and periods of inactivity.