Definition: Churn rate, also known as attrition rate or customer churn, is a business metric used to quantify the rate at which customers stop using a company’s product or service over a given period of time. It is expressed as a percentage of total customers at the start of the period, and is calculated by dividing the number of customers who have discontinued their use of the product or service by the total number of customers at the beginning of the period.
The churn rate is an important indicator of a company’s overall customer satisfaction and loyalty, as high churn rates can indicate that customers are not happy with the product or service offered and are seeking alternatives. A high churn rate can also indicate a lack of customer retention efforts and can lead to lost revenue and reduced growth potential for the company.
Use It In a Sentence: The company’s churn rate of 5% meant that out of 100 customers, 5 discontinued their use of the product or service in a given period, indicating a need for improvement in customer satisfaction and retention efforts.
More Definitions: Conversion Rate Optimization Definition, Closing Rate Definition, Quota Definition, Heatmap Definition
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