Word of the Day: churn rate

Word of the Day Daily updates on the latest technology terms |May 24, 2017

churn rate Churn rate is a measure of the number of customers or employees who leave a company during a given period. It can also refer to the amount of revenue lost as a result of the departures. The terms employee churn and employee attrition are used interchangeably but are technically different. Employee attrition refers to the loss of an employee who is not replaced, resulting in workforce reduction. Changes in a business's churn rate can provide valuable insight into an organization. The customer churn rate may indicate the response to an organization's services, customer satisfaction, pricing and competition; reflect on employee morale; or provide insight into the average length of time an individual remains a customer or employee. As such, churn rate is an important business metric. According to various studies, it costs five to seven times as much to attract new customers than it does to retain current customers. Current customers are far more likely to buy products than new customers; a commonly used metric puts the odds at 60% to 70% of selling to a current customer versus just a 5% to 20% probability for a new customer. Tracking customer churn rates in e-commerce can help companies develop strategies to enhance and retain customers, thereby lowering costs typically associated with onboarding new customers.   Some industries, such as fast food and contact centers, deal with high employee churn rates as a matter of course. The average contact center, for example, has an annual employee attrition rate as high as 40% and the total cost of replacing an employee ranges from $10,000 to $15,000, according to reports published by the International Customer Management Institute. Quote of the Day "Turnover is a reality in any organization, so it's wise to have a pipeline for new talent coming into the organization." - Ernie Hayden   Trending Terms customer satisfaction predictive technology employee churn leaky bucket monthly recurring revenue   Learning Center Corporate wellness software can help employers reduce turnover Wellness programs are integral to employee engagement and retention, according to data from a corporate wellness software vendor. The link between employee engagement and customer experience Some experts argue that the secret to a good customer experience is engaged employees, and that principle goes beyond contact centers to the company at large. Don't let false assumptions drive your customer communication strategy Companies often assume they know their customer base and dial in customer communications. Here are three tactics to ensure your communication strategy is on target. Effectively use surveys to measure and increase employee engagement Learn how one HR executive partnered with a survey provider to measure his organization's employee engagement and analyzed it against benchmarks. Marketing company uses in-database analytics to fight customer churn Trident Marketing employed an IBM Netezza in-database analytics data warehousing appliance and Fuzzy Logix libraries to beat customer churn. Writing for Business The amount money a customer invests in a service can reduce a company's churn rate and increase the chances they'll stick with around for the long ______. A. haul B. hall Answer       Stay In Touch For feedback about any of our definitions or to suggest a new definition, please contact me at: mrouse@techtarget.com   Visit the Word of the Day Archives and catch up on what you've missed!   FOLLOW US About This E-Newsletter This e-newsletter is published by the TechTarget network. To unsubscribe from Whatis.com, click here. Please note, this will not affect any other subscriptions you have signed up for. TechTarget, Whatis, 275 Grove Street, Newton, MA 02466. Contact: webmaster@techtarget.com Copyright 2016 TechTarget. All rights reserved.