What does churn rate measure?

Churn rate is a critical metric in business that specifically measures the rate at which customers stop doing business with a company or cease their engagement. It reflects customer retention and loyalty, providing insights into how well a business is maintaining its customer base. A high churn rate can indicate dissatisfaction among customers or a failure to meet their needs, while a low churn rate suggests that customers are satisfied and likely to continue their relationship with the business.

Understanding churn rate is essential for businesses aiming to improve customer retention strategies, enhance service quality, and ultimately increase profitability. By analyzing churn rate, companies can identify patterns and underlying issues that may be causing customers to leave, allowing them to make informed decisions to improve customer experience.