While "customer attrition" describes the phenomenon, "customer attrition rate" is the metric. It puts a percentage on it so you can track it over time, compare it to benchmarks, and report it to people who like numbers in their slides.
The formula
(Customers at start of period − customers at end of period, excluding new signups during the period) ÷ customers at start of period. The exclusion is important — if you let new acquisitions inflate the denominator, attrition rate falls whenever marketing has a good month, even if retention is unchanged.
- Annual attrition rate is the most common form, especially for finance reporting.
- Quarterly attrition rate shows up in subscription operating reviews.
- Cohort attrition tracks a single signup cohort over time — the most diagnostic version, because it isolates retention from acquisition mix.
Annual vs. monthly
Most subscription dashboards report monthly churn. To translate into annual attrition rate, the formula is 1 − (1 − monthly_churn)^12. A 5% monthly churn becomes about 46% annual attrition; 3% monthly becomes about 31% annual. Always do the compounding math — multiplying by 12 overstates the loss substantially.
How to use the rate
A single attrition-rate number is a starting point, not an answer. Slice by signup channel, by plan, by tenure cohort to find where the attrition concentrates. A 40% annual attrition rate could be 20% across most cohorts and 80% in one bad-fit channel — and the fix is completely different in each case.
See also customer attrition and churn rate — the same concept told three different ways.