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Let's take the customer churn definition from this article, that I have also seen in other sources.

Let’s do the maths with one example: On January 1st you have 1000 customers. 100 of them are not using your service at the end of the month anymore. Furthermore you have acquired throughout January (31st of January) 500 new customers where 125 directly churn out. Simplest calculation looks as follows: (100 + 125)/1000 = 0.225

Why do we divide by 1000? Wouldn't it make more sense to divide by the total amount of users in period, 1500?

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Customer churn rate is simply the number of customers lost over the period divided by the starting number of customers for that period.

If we look at the formula in the link you share, it says basically it

customer churn formula

Here we read to divide by Total customers at the start of fixed period. Considering the begining is 1st of January and we have at that point 1000 customers, it's clear one needs to divide by 1000.

To note: To understand whether you lost or gained customers overall you can compare the churn rate to the growth rate (divide the number of new customers by the starting number of customers).

  • Other sources divide by the total customers during the fixed period, that is customers at start + customers gained – Euphe Jul 5 at 11:42
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    Found only one Medium article (mobilegrowthstack.com/…) that says it's the total customers at the end of the fixed period. Then, from Quora, we can read many marketeers saying churns in a time period / active customers during that time period, making it unclear if it's in the beginning or at the end. From other sources, including Wikipedia, customer churn / attrition rate is calculated using customers at the beginning of the period. – Tiago Martins Peres Jul 5 at 13:09

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