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Churn rate measures the percentage of customers or subscribers who stop using a product or service during a given time period. High churn destroys recurring revenue; reducing churn by just 1–2% can dramatically improve long-term revenue.

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1. 1Count customers at the start of the period
2. 2Count customers lost (cancelled, not renewed) during the period
3. 3Churn rate = (Customers lost / Start customers) × 100%
4. 4Monthly and annual churn compound — 5% monthly churn = 46% annual churn

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