Commerce Glossary

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What is Churn Rate (Attrition)?

churn rate
noun
Customer churn happens when a company loses customers due to various reasons.
How Does the Churn Rate (Attrition) Work?

There are two types of attrition: voluntary churn and involuntary churn.

Voluntary churn happens when a customer decides to stop using a product or downgrades from a paid version. Tactics to combat it include email reminders, manual renewal offers, cancel flows, collecting feedback or shifting customers to auto-renewal.

Involuntary or passive churn happens when subscriptions are canceled without action on the customer's part, but due to failed payment authorizations. There can be many reasons for payments to fail, and also numerous ways to prevent and recover them, from intelligent payment routing - which prevents payment failures before they happen to account updater services and dunning management.

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