Churn

Questions

What is Churn?

Churn measures how quickly customers cancel or stop buying. It compounds quietly: if people leave as fast as you win them, growth becomes expensive motion. Researchers Reichheld and Sasser found that small cuts in customer defections could raise profits sharply, because loyal customers cost less and buy more.

How do you use Churn?

Apply it to your own life: cancel subscriptions you wouldn't buy again, call clients who drifted away, and keep old friendships warm before they go cold.

When does Churn matter?

Churn is one of the 56 mental models for strategy, the situations where you ask: How do I win when others want the same thing? Within that, it belongs to “Winning customers”, alongside Adverse Selection, Apostle Model and Customer Development.

What is an example of Churn?

Two stories show it at work: Zero defections (1990) and Blue Apron (2017–2023). Both are told in full in The Mental Models Daily Almanac, which has two stories for each of its 365 models.

Which mental models are related to Churn?

Compounding Effect, Switching Costs and Survivorship Bias. Churn itself comes from economics.