What does customer churn refer to?

Customer churn refers to the loss of customers over time. This concept is critical for businesses to understand, as it can directly impact revenue and growth. Analyzing churn rates helps companies assess their customer retention strategies and identify areas for improvement. High churn rates may indicate issues such as dissatisfaction with products or services, better offers from competitors, or changes in customer needs.

While acquiring new customers and enhancing customer engagement are important aspects of business growth, they do not directly define churn. Similarly, an increase in customer loyalty indicates a positive relationship with existing customers but does not address the aspect of losing them. Understanding churn allows businesses to implement strategies to retain their existing customers, thus maintaining a stable revenue base.