Churn rate

The churn rate or rate ( engl. churn ( rate) of to churn = Move jmdn, stir ) is a term in economics, which is known primarily from the telecommunications and has been found in the area of ​​subscription sales and online marketing place.

The churn rate defines the recorded over a period of time the number of customers or participants who do not use the service further divided by the total number of customers. It gives an overview of the growth or decline of customers and the average length of participation in the service.

This resulting percentage is used very well to measure customer satisfaction, depending on the industry, and thus to take action in marketing, in order to reduce the churn rate. A typical short-term means of increasing the rate of churn of competitors is the rotation at the price spiral. Measures to reduce the churn rate would be, for example: customer recovery ( engl. customer recovery), acquiring new customers and increasing customer satisfaction.

The churn rate is especially important in areas of the market where customers are very changeable willingly concerning their providers (eg telephony, Internet service providers, utilities ). For example, the possibility of number portability has led to increased churn rate of customers, as an important change impediment was removed.

In marketing, this is also known as customer relationship management tools uses (CRM- tools) that provide all the information about the client relationship in a central database.