churn
CHERN
/tʃɜːrn/
The rate at which customers stop doing business with an entity; to lose customers.
Churn is the 'leaky bucket' of business. Even if you gain many new customers, a high churn rate can sink a company.
The story behind the word. Originally, to churn meant to shake milk or cream violently to make butter. In business, it describes the 'agitation' of a customer base where people are constantly moving in and out.
Word relationships
- attrition: Attrition is a general term for reduction; churn is specific to the loss of customers in a business cycle.
- loss: Loss is general; churn is a rate or a process of repeated loss.
- retention: Retention is keeping customers; churn is losing them.
Commonly confused with
- turnover: Turnover can mean total sales or employee loss; churn is almost exclusively used for customer loss in modern business.
Word family
- churning (verb/noun): The act of losing customers or agitating something.
Collocations
- churn rate
- customer churn
- reduce churn
- high churn
Idioms & expressions
- churn out
Example sentences
- "The high churn rate among first-year subscribers is our biggest threat to profitability." Discussing the health of a subscription-based business.
- "Churn is the silent killer of startups; you can't grow if you're losing customers as fast as you find them." A technical definition of the term.
Memory hook
Think of a washing machine 'churning' water. The customers are being tossed around and eventually washed away. Agitated customers wash away.
When not to use
Do not use 'churn' to describe employees leaving (that is 'turnover' or 'attrition') unless you are specifically in a HR context that uses the term.
Fun facts
- In the stock market, 'churning' is an illegal practice where a broker over-trades a client's account just to generate more commissions.
Explore more words
attrition, deteriorate, unsustainable, overhead, scalable, Depreciation
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