Churn

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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.
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