Churn
Nowadays I’m working on the LetsBuyIt’s database and I’m trying to be as accurate as possible concerning my predictions. The Churn is one of the big factors that I know I need to consider but it’s difficult to evaluate.
Churn rate is also sometimes called attrition rate. It is one of two primary factors that determine the steady-state level of customers a business will support.
In its broadest sense, churn rate is a measure of the number of individuals or items moving into or out of a collection over a specific period of time.
The term is used in many contexts, but is most widely applied in business with respect to a contractual customer base. For instance, it is an important factor for any business with a subscriber-based service model, including the new LetsBuyIt.
The phrase is based on the English idiom “to churn up”, meaning to agitate or produce violent motion.
Are you familiar with the churn in your business? What’s the average percentage of your database concerned by this?
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Tags: Business Model, business, database, users
May 13th, 2007 at 12:42 pm
In the utilities business in the UK the churn rate is about 15% (so 15% of the customer base switches Electricity or Gas suppliers in a 12 month period). Abroad churn for utilities is much lower. In Germany their churn is only around 4%.