Churn Rate
The proportion of customers who cease purchasing from a retailer within a defined period, used as a measure of customer retention failure.
Full Definition
Churn rate in retail analytics quantifies customer attrition by calculating the percentage of active customers at the start of a period who made no purchase by the period's end. It is a critical input for customer lifetime value models and loyalty programme evaluation. Retailers distinguish between voluntary churn (customers who actively switched to a competitor) and involuntary churn (lapsed customers). High churn rates trigger targeted win-back campaigns informed by predictive analytics. Editors must not conflate 'churn rate' with 'return rate,' which refers to product returns, not customer attrition.
Usage
Usage note: Two words, unhyphenated as a noun. Hyphenate as a compound modifier: 'churn-rate analysis.' Always specify the measurement period and the definition of 'active customer' in analytical documents.
In Context
- "The loyalty programme reduced annual churn rate from 28% to 19% among cardholders in the pilot region." — Customer analytics report
- "A rising churn rate in the premium segment prompted a review of the retailer's pricing strategy." — Executive dashboard commentary