Churn Rate

Churn rate is the inverse of retention rate. If your retention rate is 80%, your churn rate is 20% — meaning one in five customers does not return. For subscription businesses, churn is measured by cancellations. For cafes, restaurants, and service businesses, churn is measured by the absence of visits.

Churn is expensive. Every customer who leaves must be replaced by a new one — and acquiring new customers costs five to seven times more than retaining existing ones. High churn creates a leaky bucket: you pour marketing spend in at the top, but customers drain out at the bottom.

The problem with churn in brick-and-mortar businesses is invisibility. A customer stops coming, and you might not notice for weeks or months. Digital loyalty cards make churn visible. Your dashboard flags customers whose visit frequency has dropped, giving you the opportunity to send a win-back notification before they become someone else's regular.