Final answer:
Churn, or churn rate, is a business metric used to measure customer retention. It refers to the rate at which customers or subscribers stop using a product or service over a given time period.
Step-by-step explanation:
The term churn, or churn rate, is commonly used in business to refer to the rate at which customers or subscribers stop using a product or service over a given time period. It is a key metric used to measure customer retention. Churn rate can be calculated by dividing the number of customers lost during a specific time period by the total number of customers at the beginning of that period, and then multiplying by 100 to express it as a percentage.
For example, if a company had 1000 customers at the beginning of a month and lost 50 customers during that month, the churn rate would be (50/1000) * 100 = 5%.
Understanding churn rate helps businesses identify potential problems in their products or services, customer satisfaction, and customer loyalty. It also enables businesses to take necessary measures to reduce churn and improve customer retention.