Why it matters
Some customers leave because they decide to. Others leave because a card expired, a bank blocked a charge or a payment failed and nobody fixed it. Involuntary churn counts the second group, people who would probably have stayed if the payment had gone through.
It matters because it is the most fixable kind of churn. Someone who cancels decided to go, and only the product can change that, while someone lost to a failed charge can often be recovered with a retry or a clear message. Separating the two shows how much of your churn is a billing problem and how much is a product problem.
The formula
In words: the customers who left through an uncollected failed charge, divided by the customer count at the start of the period, then multiplied by 100.
In symbols:
involuntary_churn_rate = customers_lost_to_uncollected_charges / customers_at_start x 100- The denominator is the opening customer count, so anyone who joined partway through is not counted.
- Count a customer as involuntary when the subscription ended after a failed charge that stayed unpaid, whatever the cancellation flag says.
- Voluntary churn plus involuntary churn equals total churn for the period.
A worked example
Example numbers (made up for illustration): a business began a month with 2,000 subscribers. Some chose to cancel and some were lost because a failed charge was never collected.
| Kind of loss | Customers lost | Share of opening customers |
|---|---|---|
| Voluntary (chose to cancel) | 70 | 3.5% |
| Involuntary (uncollected failed charge) | 50 | 2.5% |
| All churn | 120 | 6.0% |
50 subscribers lost to uncollected charges out of 2,000 at the start is an involuntary churn rate of 2.5%. It makes up 42% of all customers lost that month.
- Voluntary: 3.5%
- Involuntary: 2.5%
How to improve it
Involuntary churn falls when failed payments are caught and fixed before the subscription ends.
- Build a recovery sequence of retries and clear messages, as described under dunning.
- Email customers ahead of a card expiry with a link that updates it in one step.
- Give customers a short grace period so a fixable card problem does not cut off their access.
- Offer a second payment method at sign-up or in account settings.
- Check the involuntary share each month, so a change in billing shows up quickly.
Common mistakes
- Filing every cancellation under voluntary churn, which hides a billing leak that could be fixed.
- Counting new customers whose first charge failed. They never became customers, so they do not belong in the figure.
- Dividing by the closing customer count instead of the opening count.
- Waiting for a customer to press cancel before counting a loss, so unpaid subscriptions that lapse are missed.
Work it out with your own numbers
The churn rate calculator takes your opening customers and your losses, and you can enter the involuntary losses on their own. Open the churn rate calculator and enter your own figures. It runs in your browser and shows each step of the sum.
Read next
- Churn rate: total churn, which involuntary churn is part of.
- Dunning: the process that prevents involuntary churn.
- Payment recovery rate: how much of the failed revenue you win back.
Questions
What is the difference between voluntary and involuntary churn?
Voluntary churn is a customer choosing to cancel. Involuntary churn is a loss caused by a charge that failed and was never collected.
Why use the opening customer count?
It keeps new customers out of the rate. Customers who joined during the period had no chance to be lost from the starting group.
How do I tell the two apart?
Look at whether the subscription ended after a failed charge that stayed unpaid. If it did, count it as involuntary, whatever the cancellation reason says.