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Brandirect Home > Our Voice > Archived Articles > What the Heck is "Churn Rate," and How is it Hurting You? - 2003-08-06

What the Heck is "Churn Rate," and How is it Hurting You? - 2003-08-06

If you want a real challenge, sit down and try to write a sentence about your business without using any buzzwords, acronyms or clichés. If you're successful writing one sentence, then try another. If you get that far, complete the paragraph... and call us. We want to hire you... our customers will love you!

We marketers are creative folks. We are continually inventing new words and phrases to describe age-old phenomena. Oftentimes our flowery language describes important things, to be sure, but our linguistic sugar-coating is dangerous for two reasons:

We may not understand what we're saying.

If WE don't understand what we're saying, our customers will never get it!

One phrase we hear a lot these days is "churn rate." Churn is something you don't want your best customers, employees and investors do. It can cost you lots of money. It's not a new phrase, but we hear it a lot these days because it's hurting a lot of companies.

Churn measures how fast people leave you. (If you have 100 customers and 50 of them leave you during the year, then your churn rate for that year is 50%). It's another way of saying "we lost the business." A high churn rate can be very bad, depending on who's leaving you, and how fast they're leaving.

High churn rates are often associated with business systems that don't properly appreciate people. If you're not delivering real value to your customers, employees or investors, they'll churn on you. If you want to realize the profitable impact of reducing churn, call Brandirect.