Formula
Churn Rate = (Number of Customers Lost in Period / Number of Customers at Start of Period) x 100
Know your metric
Importance of
Churn Rate
Essential for understanding customer retention and service success.
Retention Insight
Shows how well a company retains its customers.
Product Quality Indicator
High churn can indicate dissatisfaction with the product or service.
Revenue Impact
Directly affects recurring revenue and profitability.
Drawbacks of
Churn Rate
Difficult to interpret without context.
Not Cause-Specific
This does not indicate the reasons for customer departures.
Volatile
Can vary greatly with market conditions and customer base size.
Management Complexity
Requires continuous monitoring and strategic response to improve.
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