Churn Rate: How to Measure, Benchmark, and Reduce Customer and Employee Churn

What Is Churn Rate?

Churn rate is a metric that measures attrition: how many customers stop doing business with a company, or how many employees leave, over a specific period. Typically measured as a percentage, it needs to be monitored monthly, quarterly or annually.

Customer churn (sometimes called revenue churn or logo churn), directly impacts growth since each lost customer is revenue to replace, before the business can grow at all. High customer churn creates a “leaky bucket” situation. One might be putting in more business, but a good percentage is leaking out the bottom.

Employee churn, particularly in customer-facing roles, creates a secondary churn problem. When experienced agents leave, service quality drops, training costs rise, and customers notice. The connection between employee satisfaction and customer satisfaction is well established: teams with high turnover consistently produce worse customer experience outcomes than stable, experienced teams.

How to Calculate Churn Rate

Customer churn rate can be calculated by:

Customer Churn Rate = (Customers Lost During Period / Customers at Start of Period) × 100

Similarly, 

Employee Churn Rate = (Employees Who Left During Period / Average Headcount During Period) × 100.

Sometimes organizations want to differentiate between voluntary and involuntary churn (when they leave on their own vs when it's their termination, failed payment or expiring contract). The approach and strategy used to combat them differs drastically. Voluntary churn requires an effort to retain, while involuntary requires a process change.

Churn Rate Benchmarks

The employee churn rate is grim, especially in contact centers. Between 30-45% agents leave per year, according to QATC benchmarking data and SQM Group research,which is among the highest of any industry. According to a study by Metrigy in 2024, contact center agent turnover has climbed to 31.2% annually. By comparison, the overall U.S. workforce averages approximately 22% annual turnover.

The monetary value lost in agent turnover escalates rapidly. According to McKinsey & Company research, a lost agent costs the company over $10k-$20k in replacement, including recruiting, onboarding and productivity lost during the first few weeks of a new agent’s journey. For a 100-seat operation at 40% attrition, that adds up to over $400k-$800k walking out the door on a yearly basis.

Customer churn benchmarks vary depending on the business model. Most SaaS businesses experience 5-10% yearly customer churn, whereas consumer subscription services may have significantly higher churn. For contact centers and service businesses, a monthly customer churn of 1-3% is often acceptable.

How to Reduce Churn

For customer churn:

One of the best ways to reduce customer churn is early identification. Customers who are going to leave almost always show signals, usually in terms of decreased usage, outstanding support issues, skipped payment deadlines, etc. Creating a churn prediction model, even with minimal information such as log-in patterns and support ticket volume, can put customer success managers in the know, giving them the heads up to try and retain a customer.

Proactive customer retention also tends to be far more effective than reactive retention. A proactive touch point with customers before they voice concern, makes them feel valued and can stop the thought of leaving. This is where telli comes into play. Telli’s use case for customer engagement specifically focuses on outreach to customers at the right time to try and stop them before they drop off the radar completely.

For employee churn:

The major cause for voluntary employee churn in contact centers is burnout. It occurs when agents spend a significant portion of their days completing low-complexity, repetitive tasks. When this happens, agents aren’t being challenged and often get overwhelmed.

Of course, things such as scheduling, career development, and management also play a role in this, but at the end of the day, those don’t solve the root issue of repetitive, overwhelming tasks. If an agent’s job description continues to include routine, monotonous tasks, employee retention rates in customer service may continue to suffer even with career opportunities and favorable scheduling. By offloading these tasks to the right AI agent, employees are free to do work that they find more interesting, fulfilling and that directly impacts the customer experience more profoundly.

How telli's AI Voice Agents Help Reduce Churn

telli's AI voice agents address both types of churn simultaneously.

They improve the customer experience by mitigating lost calls, long hold times and uneven service delivery that drive customers away. A customer who can't reach support during a critical moment like a billing issue, a service outage or a scheduling conflict, is a customer who starts looking for alternatives. AI voice agents provide consistent, 24/7 coverage that eliminates the availability gaps that often trigger churn decisions. 

On the employee side, AI voice agents absorb the high-volume, repetitive work that burns agents out. When routine scheduling confirmations, status updates, and FAQ-style inquiries are handled automatically, human agents spend more of their time on conversations that require empathy, judgment, and expertise. That shift in the nature of the work reduces the monotony and pressure that drive voluntary attrition.

Customer Spotlight: Enpal

Enpal, Europe's leading residential solar provider with over 100,000 customers, faced a service scaling challenge that had direct implications for churn. Their customer success management team was responsible for scheduling maintenance appointments across a large and growing customer base, but limited bandwidth meant only two callback attempts during business hours, resulting in a 75% connection rate. Missed appointments and delayed service created exactly the kind of friction that erodes long-term customer relationships.

telli's AI voice agents were able to tackle Enpal's customer retention challenges by placing outbound appointment confirmations and inbound reschedule/cancellation callbacks during evening and weekend hours, ultimately raising connection rates to 90%. Enpal's employees were freed up 40% of the time spent on these tasks, were able to contact 20% more customers, and boosted the number of scheduled weekly appointments by 30%.

More importantly, human agents could focus on the value-driven, complex issues that matter when nurturing customer relationships that build loyalty, rather than dealing with basic routine issues that the AI can handle perfectly well.