How to calculate the attrition rate of your customer base?

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Some companies manage to attract new customers , but all end up losing them, and some by the truckload! Indeed, every year, companies lose an average of 10% of their customers, or 50% every 5 years, according to a study by the Harvard Business Review. All sectors and companies are impacted by the volatility of customers who are more demanding and informed than ever: the rise of certain international e-commerce sites, plethora of offers at the click of a button, increased competition and new entrants, price fluctuations, etc. Companies that do little or nothing to retain their current customers helplessly watch a mass exodus of their customers to competitors who are ready to do anything to attract and retain them. This loss of customers has a name: attrition, or Churn (in the language of Game of Thrones). In this article, we explain how to calculate the attrition rate of your customer base .

Why calculate attrition rate or churn rate?
Acquiring a new customer costs between 5 and 25 times more america cell phone number list than retaining existing customers. So it is in your best interest to try to retain your hard-earned customers through prospecting !

Then, as the venerable William Thomson said: “ If you cannot measure it, you cannot improve it .”

For non-English speakers, this means: “ if you can't measure it, you can't improve it .”
To reduce your attrition rate, that is to say: reduce the number of customers who leave you over a given period, you first need to know the number of customers who leave you.

This seems obvious, but without a CRM tool or up-to-date customer file, few companies are able to give you the number without going through accounting.

Once you have identified the extent of the phenomenon , you can investigate the reasons for these departures ! If you do not know how many customers you are losing over a period, you will not be able to plan corrective actions, in particular to roll out a different strategy to reduce the hemorrhage, which will result in a loss of turnover.

attrition rate meeting turnover

Definition and formula of attrition rate
The attrition rate is an indicator that allows you to measure the loss of subscribers or customers over a given period. Conversely, we find the retention rate.



Attrition rate
The calculation of the attrition rate is as follows: simply divide the number of customers lost by the total number of customers at the beginning of the given period, then multiply the result by 100 .

(number of customers lost / total number of customers over the period) X 100

Retention rate / loyalty rate
To calculate the retention rate, the formula is:


When should attrition rate be calculated?
Calculating this rate monthly is a good compromise. Over a week, too many parameters can come into play, and your analysis risks being biased. If you calculate it over the year, it's already too late to respond!

A point per quarter or four months is, in our opinion, essential. It also depends on the customer life cycle (or lifetime value in the original version). We talked about it in this article on customer acquisition costs .