Definition of Churn rate:
The annual percentage rate at which customers stop subscribing to a service or employees leave a job.
Reciprocal of customer retention rate: higher the churn rate, lower the customer retention rate, and vice versa.
A high churn rate could adversely affect profits and impede growth. Churn rate is an important factor in the telecommunications industry. In most areas, many of these companies compete, making it easy for people to transfer from one provider to another.
The churn rate, also known as the rate of attrition or customer churn, is the rate at which customers stop doing business with an entity. It is most commonly expressed as the percentage of service subscribers who discontinue their subscriptions within a given time period. It is also the rate at which employees leave their jobs within a certain period. For a company to expand its clientele, its growth rate (measured by the number of new customers) must exceed its churn rate.
How to use Churn rate in a sentence?
- The churn and growth rates are diametrically opposed factors as one measures the loss of customers and the other measures the acquisition of customers.
- The churn rate is especially important in industries where revenues are heavily dependent on subscriptions.
- The churn rate for cable is much higher than that for satellite services.
Meaning of Churn rate & Churn rate Definition