🎓 Definition

The Churn Rate, also known as the attrition rate, or Customer churn, defines the percentage of Customers who stop doing business with an entity compared to the total number of Customers. For example, it can be the percentage of service subscribers who discontinue their subscriptions – de facto or by stopping their shopping - within a given time period.

🧪 Churn Rate calculation Example

Let's say, a Store had 80,000 Loyal Customers in its database in September. At the end of the November, Store found that 3,000 Loyal Customers didn't shop in the Store. This would mean Churn Rate is 3.75 percent ((80,000 customers - 77,000 customers) / 80,000 customers = 3.75%).

Usually, Retailer considers Loyal Customers as Churn if they haven’t shopped within 9-12 weeks.

❓What Churn Rate is used for

• To identify Loyal Customers who stopped shopping within the selected period of time. To know Churn rate is important because losing Loyal Customers means losing revenue. So, churn rate is one of the KPIs that identifies the number of losing Loyal Customers Retailer wants to monitor.

• To improve Customer retention and save the cost of finding a new customer. It is critical to improve Customer retention and reduce Churn, the cost to acquire New Customer is more higher than the cost to invest in keeping existing Loyal Customer. Retailers that lose Customers are not just losing the revenue from those Customers but they are also hit with the high cost of acquiring new ones.

• To understand the reason why customer churn and manage profitable long-term relationships with Loyal Customers. Retailers needs to understand why Customers churn if they want to grow and adapt to meet their Customers' needs. Knowing Customer churn rate is the first step for a Retailer to improve Customer Experience and ensure profitable long-term relationships with customers.

• To plan Targeted Campaign, to address the needs of Churn Customers by proposing a Commercial offer which fits their expectations is a way to tell Churn Customers "Thank you, We heard you, please find our offer....". Usually few Targeted Campaigns will be needed to get back a Churn Customer.

🖥️ Make it happen in Ulys CRM

How to access Churn in Ulys:2 Simple Steps

Step 1: Select Buying Pattern under the Behaviors Menu in the Menu Bar.

Step 2: Select the Option in the Filter Menu and select the frequency and period you want to measure.

And here it is. The Churn customer will appear in the Loyal Customer Composition widget.

You can also extract the List of Customers who are identified in each segment of Loyal Customer Composition from the Table icon.

Learn more about Churn Rate
Churn Management
Loyal Customers
Targeted Offer