CCR

Customer Churn Rate

Customer churn rate, often called churn rate, is a business metric that calculates the percentage of customers who stop using a company’s product or service during a particular time frame. It is a critical metric because it is generally more costly to acquire new customers than it is to retain existing ones. Churn rate is used across various industries but is particularly prominent in subscription-based services and telecom businesses.

To calculate the churn rate, you divide the number of customers you lost during a specific period (let’s say a quarter) by the number of customers you had at the beginning.

Customer Churn Rate Formula

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For example, if you started the quarter with 1000 customers and lost 50 customers during that time, the churn rate would be:

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Understanding and managing the churn rate is crucial. A high churn rate may indicate dissatisfaction with a product or service, ineffective customer service, or better competition in the market. Reducing the churn rate can lead to increased revenue and a more sustainable business model. Strategies to reduce churn include improving customer service, offering personalized experiences, engaging customers regularly, and understanding customer needs and feedback.

• Abbreviation: CCR