Attrition rate is also commonly referred to as churn rate. A term often used by human resources professionals to determine a company’s ability to retain employees, attrition rate is increasingly used in the marketing world as a figure that points to the company’s ability to retain customers or to project the number of new sales necessary to maintain the status quo, accounting for customer churn or customer attrition
To calculate your customer attrition rate, use this simple attrition rate formula:
Number of customers lost by the end of the period divided by the total number of customers at the beginning of the period.
So as an example, to calculate attrition rate for a company that had 650 customers at the beginning of the month and 600 customers at the end of the month, the attrition rate formula would be:
Number of customers lost: 650 – 600 = 50 customers
Number of customers at the beginning of the period: 650
Attrition rate formula: 50/650 = .0769 or 7.7%
Attrition rate is a complimentary figure to retention rate, which refers to the number of customers retained during a given period, and to customer acquisition rate, which refers to the number of new customers acquired during a given period. The three figures together should equal 100 percent.