Losing customers hurts.
Especially when you've spent real time and money getting them in the first place.
The churn rate is what tells you just how often this happens, how many people stop buying from you, cancel their subscription, or simply disappear.
And if your churn rate seems a bit too high lately... you're not alone.
The good news? You can absolutely do something about it.
In this article, we’ll break down what churn rate really means, how to calculate it properly, and most importantly, how to reduce it with strategies that actually work.
Let’s turn customer loss into a growth opportunity.
Churn rate, also known as attrition or customer loss, is the percentage of customers your business loses over a given period.
In simple terms, it's the people who stop buying from you, cancel their subscription, or choose not to come back.
In marketing and e-commerce, churn rate is a critical metric.
It shows whether your retention efforts are paying off or not.
The higher your churn rate, the more customers you’re losing, and the more it can impact your business.
That said, not all churn is necessarily negative.
The key is to understand it, figure out where it’s coming from, and take action to reduce it.
👇 Discover 5 other key e-commerce KPIs to improve your performance.
Understanding churn is one thing.
Knowing how to measure it is even better.
Tracking your churn rate properly helps you anticipate losses, adjust your retention strategy, and ultimately protect your revenue.
The most common formula to calculate churn rate is:
Churn rate = (Number of customers lost / Number of customers at the start of the period) x 100
Let’s take a simple example.
If your store had 1,000 customers at the beginning of the month and you lost 50 during that month, here’s the calculation:
(50 / 1,000) x 100 = 5%
That means 5% of your customer base churned in a single month.
It’s a signal you don’t want to ignore.
Depending on your business model, you might want to go beyond the basic formula.
There are a few variations of churn rate that can give you deeper insights into what’s really going on.
If you lose only a few customers but they were high spenders, revenue churn becomes a more accurate and relevant indicator than customer churn.
Net churn takes both losses and gains into account. It subtracts the additional revenue generated from existing customers (like upsells or subscription upgrades) from the total revenue lost.
Net churn = Revenue lost – Revenue gained from existing customers
It’s a great way to see if your internal growth is strong enough to offset the churn.
The time frame you use to calculate churn rate matters.
It affects how you read the numbers and the kind of actions you should take.
Choose the churn rate calculation that best fits your business model and decision-making cycle.
Tracking both over time is ideal to spot patterns and adjust your retention strategy before churn becomes a real threat to your growth.
Churn rate isn’t just another number on your dashboard.
It’s one of the clearest signs of how your business is really performing.
When it goes up, it usually means something's off.
And the impact can snowball fast across your entire operation.
Every customer you lose is revenue you no longer earn.
This is especially painful if your business relies on subscriptions or repeat purchases.
The fewer active customers you have, the smaller your monthly revenue base becomes.
And if churn becomes a pattern, your financial stability can quickly take a hit.
A high churn rate drives up your customer acquisition cost (CAC), because you're constantly replacing lost customers instead of growing your base.
At the same time, your customer lifetime value (LTV) drops, since customers don’t stick around long enough to become profitable.
That’s how a weak retention strategy slowly drains your margins.
👉 Strengthen your retention strategy with these 10 highly actionable tips to keep your customers longer.
Churn directly impacts your net growth rate : the balance between what you gain and what you lose.
If you acquire 1,000 new customers but lose 800, you’ve only grown by 200.
And if that gap closes completely, or flips, your business stops growing. Or worse, it shrinks.
Understanding why customers leave is just as important as trying to keep them.
A high churn rate doesn’t happen out of nowhere it’s usually the result of very specific friction points.
Let’s break down the key factors that influence your churn rate.
If your product underdelivers or your service fails to meet expectations, even once, it can hurt your brand perception.
In e-commerce, that’s often enough to lose a customer for good.
Slow load times, checkout friction, bugs on mobile : all of these add up.
The smoother your experience, the lower your churn rate. It’s that simple.
If customers stop opening your emails, don’t react to promotions, or haven’t bought in weeks, they’re already halfway out the door.
Engagement is a strong retention signal and one of the best predictors of churn.
Failed payments, unclear subscription terms, auto-renewals that feel sneaky… These are major drivers of involuntary churn.
Automated alerts, reminders, and a transparent billing process can help you retain these customers.
If your competitors are cheaper, faster, or simply easier to buy from, your churn rate will reflect that.
In highly competitive markets like fashion or beauty, brand loyalty is fragile and standing out is essential.
In e-commerce, losing a few customers comes with the territory.
But at what point should your churn rate start raising red flags?
And what does a “normal” churn rate actually look like for your type of business?
Spoiler: there’s no one-size-fits-all number but there are solid benchmarks to guide you.
In e-commerce, losing a few customers is part of the game.
But when should you really start to worry?
And above all, what does a good churn rate look like for your model? Here are some concrete benchmarks based on analyses by Shopify and Churnkey.
According to Shopify, traditional e-commerce sites (without subscriptions) often have a monthly churn rate of between 5% and 8%, especially when the average order value is low or purchases are infrequent.
Falling below 4% is already a very good sign of retention.
According to Churnkey, brands based on a subscription model typically experience a churn rate of 10% to 15% per month during the first three months after registration.
After that, a rate stabilising around 5% is considered healthy and under control.
Shopify also points out that in highly competitive sectors such as fashion and cosmetics, churn rates are often higher.
Unless you offer a truly differentiated experience, it is more difficult to build long-term loyalty.
According to Shopify, DTC brands or those with regular purchase frequencies must maintain low churn rates to ensure long-term profitability.
This is often a key performance indicator in this type of model.
A temporary spike in churn isn’t the end of the world : a supply issue, a pricing change, or a weak campaign can all cause it.
But if the rate stays high over several months, something deeper is wrong.
Pay attention to early warning signs like:
These are often signals that your customer experience isn’t meeting expectations.
A low churn rate doesn’t always mean your business is healthy.
Sometimes, it just means you’re not growing. If your customer base isn’t renewing, your sales are flat, and your CAC is climbing… that low churn rate isn’t helping much.
The smarter move? Look at churn alongside key metrics like LTV, CAC, purchase frequency, and profit per order.
That’s how you know if your retention strategy is really driving growth.
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Feel like you’re losing customers too fast? You’re not alone but the solution isn’t always complicated.
Often, it’s about paying more attention to the experience you deliver at every step of the journey.
The goal: reduce your churn rate by creating value and consistency at every touchpoint from the first order to support interactions, follow-ups, and beyond.
Here are 8 high-impact levers to activate first.
Customers rarely disappear overnight.
They start by opening fewer emails, skipping purchases, hesitating more.
With a churn score or basic segmentation, you can spot these signals and act early: send a reminder, offer a discount, or re-engage with a quick message.
Sometimes, one small action is all it takes to prevent churn.
Not hearing from a customer doesn’t mean they’re lost.
What matters is how and when you reach out.
A well-timed email, a personalized offer, or a relevant product recommendation can re-spark interest without feeling pushy.
Relevance beats volume. Always.
Some churn happens silently: expired cards, buggy mobile flows, checkout errors.
These pain points don’t always show up in complaints, but they cost you real money.
Audit your payment flow, mobile UX, and customer journey regularly and automate alerts to catch issues early.
Smoother experience, lower churn rate.
Loyalty isn't just about earning points.
Think bigger: create a program that makes customers feel recognized and rewarded.
Tiered benefits, exclusive perks, referral bonuses : these tactics help build an emotional connection and keep your customer base engaged over time.
Pssst... You might find this interesting!
Loyalty programs are strategic to reduce your churn rate, and we can probably help. Check out our platform!
Don’t underestimate the power of a first impression.
Even in e-commerce, a strong post-purchase onboarding flow can increase repeat rates significantly.
Think: welcome emails, clear next steps, packaging details, thoughtful touches.
Onboarding done right builds trust and that reduces churn.
A one-time customer is easy to forget. But don’t let them forget you.
Follow up with useful content, ask for feedback, recommend the next product.
It shows you care, and it extends the customer lifecycle in a natural way.
Poor support is one of the fastest ways to increase churn.
But great support? It turns unhappy users into long-term fans.
Make sure your customer service is responsive, empathetic, and accessible whether by email, chat, or WhatsApp.
It’s not just about solving problems, it’s about showing up.
From your product page to delivery emails, every interaction counts.
If every touchpoint feels thoughtful, smooth, and aligned with your brand, customers are more likely to stay.
In other words: reduce churn rate by making the experience so good, they don’t want to leave.
Reducing churn is about delivering the kind of experience that keeps customers coming back.
Loyoly helps you do exactly that, with tools designed to boost retention from day one:
It’s a simple, powerful solution for e-commerce brands that want to build long-term customer relationships.
Curious to see it in action? Request a demo.
Loyoly is a loyalty and referral platform combined with UGCs, which helps to engage customers in 40+ ways to increase LTV and social proof, while reducing CAC.
