What is Churn?

Churn is a very misunderstood topic. Everyone knows they have a churn problem, but there are no clear answers or clear owners.

Fixing churn feels like guesswork. It's incredibly cross-functional so it's harder to prioritize.

The simple definition of churn is when the customer discontinues their relationship with you.

Depending on your business, this can vary.

• Free user churn: A free user can stop using the product. For example, they uninstalled Instagram for good.

• Subscription churn: They cancelled their subscription at the end of Month 1.

• No repeat purchase: A customer doesn't transact again. They didn't repurchase your shampoo bar within 3 months. Typical in DTC or FMCG.

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Sometimes churn is good.

You fixed their problem and they don't need you again. Or, when they weren't the right audience in the first place.

For example, Unity the game dev company got an influx of customers who weren't a good ICP fit. They decided to give them a grand exit instead of trying to retain them.

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Churn is cultural

In collectivist cultures (India, Mexico), users stay if their group adopts the product. In individualist ones (US, UK), users churn quickly if personal value isn't clear.

High-avoidance cultures (Japan, Germany) research deeply and stay loyal once committed. Low-avoidance ones (US, Singapore) experiment more and churn if value fades.

We'll talk more about how culture impacts churn in a later chapter.

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