Churn rate is the number of subscribers, clients, or customers who leave or discontinue your service in a given period. In practical terms, you can retain customers. Customer churn rate or attrition rate designates the percentage of customers the company has lost over a given period.
There are several ways to calculate customer churn rate, one of the most practical one is the following:
Customer Churn Rate = (Customers lost during the period/Total customers at the start of the period)*100
Customers lost = Total Customers at the start of the period+new customers during that period- Total Customers at the end of a period
Churn rate is a reverse side of retention rate, which shows the percentage of customers a company has retained over a specific period. A rule of thumb is that it’s much cheaper and easier to retain customers rather than acquire new ones. Poor service and unsatisfying customer experience are among the main reasons why customers leave. That’s why companies use advanced CRM software, which organizes and monitors all interactions with potential or existing clients.
How can one enhance customer retention?