What Is Churn Rate?

Churn rate is a key metric that measures the percentage of users who stop using the product or the app over a specific time period. For app publishers, churn rate represents the percentage of users who stop using the app, uninstall it, or discontinue their subscriptions within a given timeframe.

Key Takeaways

Churn rate is typically measured at 1 day, 7 days, 30 days, and 1 year after users first install the app.
Most users tend to uninstall apps 3 days after the install. 30-day churn rate can reach up to 98% depending on the app vertical.
Churn rate analysis is usually done by cohorts to get reasons for early, and late churn, which if tackled correctly improve early and long-tail churn.

Why Is Churn Rate Important?

A high churn rate can highlight challenges such as a subpar user experience, limited engagement, or ineffective onboarding. Businesses always aim to stay below their industry’s average churn rate to ensure steady growth and long-term sustainability.

Tracking churn rate enables app publishers to

Pinpoint areas for improvement
Enhance the user experience, and
Implement strategies to retain users
Optimize Customer Acquisition Cost (CAC)

Reducing churn rate ultimately boosts revenue and ensures an app’s long-term success.

How to Calculate Churn Rate?

As mentioned earlier, churn rate is measured at multiple time periods – from 1 day to 1 year – after users first install the app. Typically 1 day, 30 day and Annual churn rates are the most important.

formula for 1 day, 30 day, and annualized churn rate - churn rate formula: (users at the beginning of the day - users at the end of the day)/users at the beginning of the day * 100

So, let’s say you have 10,000 users at the start of the day, and by the end of the day, only 6,000 users remain. The 1-day churn rate would be calculated as follows:

[(10,000 – 6,000) / 10,000] * 100 = 40% 1 day churn rate

You should also calculate the churn rate for different cohorts.

FAQ

What Is a Good Churn Rate?

An annualized churn rate of anywhere between four and seven percent is the norm. A “good” churn rate for your app should align with your specific goals, and it should also be within the industry. Anything lower than your industry average is considered a good churn rate.

What Are the Reasons for User Churn?

Some of the most common reasons include poor in-app onboarding, excessive notifications or ads, lack of value, and better alternatives.

How to Reduce Churn Rate?

There’s no one singular way to resolve all issues. The first step is to analyse by cohorts to find the churn reasons and then make appropriate changes to the onboarding and user experience.

What’s the Difference Between Churn Rate and Abandonment Rate?

Abandonment rate is the percentage of users who stopped using the app after 1 usage. Churn rate is calculated at various timelines across a year.

What’s the Difference Between Churn Rate and Retention Rate?

Churn rate and retention rate are opposites. Churn rate tells you how many users stopped using the app after a certain time period, while retention rate tells us how many users continued using the app after the same time period.

Vishnu Prassad

February 14, 2025 | 3 min read

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