Churn rate refers to the percentage of customers who have stopped using a company's product or service during a given period. It is an important metric used in measuring customer retention rate and helps businesses understand how well they are maintaining their customer base.
To calculate churn rate, divide the number of customers lost during a set amount of time by the total number of active customers at the beginning of that time period. For example, if a business started with 100 customers and lost 5 over one month, its churn rate would be five percent (5/100 = .05).
Understanding churn rate can help businesses identify areas where they need to improve customer satisfaction or engagement. A high churn rate indicates that there may be underlying issues leading to dissatisfaction among customers.
Customer retention rate measures the percentage of customers that continue doing business with a company over an extended period. This figure considers both new clients gained and existing ones persisting amid various promotions.
Several factors can influence customer churn rates such as inadequate communication between your staff and your clients, poor quality products/services offered or insufficient follow-up after sales made.
Businesses should focus on providing exceptional services throughout all interactions with their consumers and develop long-lasting relationships built on mutual respect. They must also remain up-to-date with current market trends changes while taking feedback constructively from client criticism.
1) "The Lean Startup" - Eric Ries
2) "Customer Satisfaction Is Worthless: Customer Loyalty Is Priceless." - Jeffrey Gitomer
3) "How Brands Become Icons: The Principles Of Cultural Branding" - D.B Holt
4) "The Art Of Client Service: 58 Things Every Advertising & Marketing Professional Should Know" - Robert Solomon
5) "The Challenger Sale: Taking Control of the Customer Conversation" - Brent Adamson and Matthew Dixon.
