Churn refers to a company’s loss of clients or subscribers. For the good of the company, the churn rate (also called turnover or attrition rate) must be carefully monitored, as it ultimately reveals decrease in customer loyalty. Churn rate is calculated by dividing the number of lost clients by the total number of clients for a given period.

This concept is key for service industries where subscriptions are essential and client loyalty is primordial, such as banking, insurance, telecommunications, or energy.

Churn rate = # of lost clients / # of total clients

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