Churn rate, also known as customer churn, is a measure of the number of customers who stop doing business with a company over a given time period. It is typically expressed as a percentage of the total number of customers at the beginning of the time period. For example, if a company had 100 customers at the beginning of the month and 10 of those customers stopped doing business with the company by the end of the month, the churn rate would be 10%.
Churn rate is an important metric for businesses to track because it can have a significant impact on the company’s revenue and profitability. High churn rates can indicate that the company is not meeting the needs of its customers or that it is facing competition from other businesses. By tracking churn rate, businesses can identify and address the root causes of customer churn and take steps to improve retention and customer satisfaction. This can help the business retain more of its existing customers, which can lead to increased revenue and profitability.