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Churn rate, also known as customer attrition or customer turnover, is a vital metric for businesses that measures the percentage of customers who cease their engagement or subscription with a company over a specific period.
We can exemplify with a streaming service company, the churn analysis is done on top of subscribers who canceled the service in a given period analyzed.
This period can be varied, in week, month, bimonthly, half-yearly, annual or other options.
This metric helps companies gauge the health of their customer base and the effectiveness of their customer retention strategies.
Understanding churn rate is crucial because it directly impacts a company’s revenue and growth potential.