The hardest part about calculating the churn rate
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The most difficult part of calculating churn rate is basing it on annual or monthly churn rate numbers.
Let’s look at what the differences are.
Let’s look at what the differences are.
Let's say a startup has 1,000 customers. An annual churn rate of 5% means 50 customers are lost in a year. That's not so dramatic, is it?
This loss can easily be made up for by new customers.
But what happens when the monthly churn rate is 5%?
Our startup will lose 460 customers in a year because monthly customer churn accumulates over time, reducing the number of customers by 5% every month.
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