Churn Rate

Churn rate (combination of “change” and “turn”) is a term from the field of customer management.

In general, it describes the number of customers a company loses within a certain period of time. Thus, it is a good way for companies to measure the strength of customer relationships and customer satisfaction.

To estimate the churn rate, companies measure the number of customers that stop using their brand or service within a certain period. Afterwards, they divide it by the number of customers they had at the beginning of this time period.

If the churn rate is too high, a company should try to improve its customer relationship management to increase the level of customer satisfaction. Apart from this, companies with a high churn rate should take different activities with the purpose of customer recovery and the acquisition of new customers.