In concept, the customer churn rate is fairly simple. The basic concept behind the customer churn rate is to measure how many customers leave a business within a given time period. The customer churn rate helps businesses identify whether they are growing or shrinking and whether or not there is some kind of problem within the business. An increasing churn rate can be an indication of something fundamentally wrong within the business or that there is a problem area that needs to be addressed.
The customer churn rate is perhaps most often used with subscription services and has thus received more attention as service and software providers move toward subscription models in the cloud. The churn rate is also an important metric required in the predictive calculation of customer lifetime value (CLTV), which has recently gained wide acceptance within...