What is Churn Rate?

Churn rate is the percentage of customers who stop purchasing from your brand within a given time period. For subscription businesses, it’s the percentage who cancel. For non-subscription DTC, it’s typically defined as customers who haven’t repurchased within an expected window.

Why It Matters

Churn is the silent killer of DTC businesses. Even small increases in churn dramatically reduce LTV and make acquisition costs harder to recoup.

How to Calculate It

Churn Rate = (Customers Lost During Period ÷ Customers at Start of Period) × 100

For subscription brands, this is straightforward. For non-subscription, you’ll need to define what “lost” means — typically no purchase within 2-3x the average repurchase cycle.

Benchmarks

Subscription DTC: 5-7% monthly churn is average; <3% is excellent
Non-subscription DTC: Varies widely by category; track cohort curves instead

Reducing Churn

Build post-purchase email/SMS flows that drive reorders
Implement churn prediction models to intervene early
Create loyalty programs that reward repeat behavior
Improve product quality and unboxing experience
Proactively address customer service issues