What is churn rate in sales?

The percentage of customers who stop using a product/service over a period.

Churn rate is the metric used to calculate the percentage of customers who discontinue their use of a product or service over a specific period. It is crucial for understanding customer retention and identifying areas for improvement.

The churn rate, also known as customer attrition rate, is a key performance metric in sales and customer service that measures the percentage of customers who stop using a product or service within a given time frame. High churn rates can indicate underlying issues such as poor customer satisfaction, inadequate product features, or strong competition. Calculating churn rate involves dividing the number of customers lost during a specific period by the total number of customers at the start of that period. Understanding and reducing churn rate is essential for businesses as retaining existing customers is often more cost-effective than acquiring new ones. By analyzing churn rate, companies can identify trends, understand the reasons behind customer departures, and implement strategies to improve customer retention, such as enhancing product offerings, improving customer support, and fostering stronger customer relationships.

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