How are the attrition numbers in the attrition calculator computed?
The basic idea behind the calculation of the churn rate of a quarter is to first determine the number of customers who left in the quarter and then divide that number by the total number of customers at the beginning of the quarter. Using a quarterly example of 25 churned customers during a quarter with a starting base of 1000 customers at the begining of Q1, 2009, this is how the attrition is calculated: QuarterQuartetly Churn is Calculated as… Q1, 200925/1000 (25 customers who left divided by 1000 customers in the beginning of Q1) Q2, 200925/975 (25 customers who left divided by 975 customers in the beginning of Q2) Q3, 200925/950 (25 customers who left divided by 950 customers in the beginning of Q3) : : The corresponding annualized churn rate is calculated as 1-(1-Quarter Attriion)^4 i.e., what would be the total annual churn rate if customers churned at the same quarterly rate in a year. So in the example, the quarterly churn rate for Q1, 2009 would be 2.5% and annualized churn
