Proportion of customers of a firm to switch to another firm. For example, if in a year 7% of a company's customers switched to a competitor, then the churn is 7%.
There is no standard formula for computing churn. Different formulas adjust for things like:
- The amount of revenue obtained from customers (weighted churn).
- Excluding customers from the calculation if they left the category.
- Treatment of customers that left and returned.
Also known as
- Churn out.
- Defection rate.