Churn rate (sometimes called attrition rate), in its broadest sense, is a measure of the number of individuals or items moving out of a collective group over a specific period. It is one of two primary factors that determine the
steady-state
In systems theory, a system or a process is in a steady state if the variables (called state variables) which define the behavior of the system or the process are unchanging in time. In continuous time, this means that for those properties '' ...
level of customers a business will support.
Derived from the
butter churn
A butter churn is a device used to convert cream into butter. This is done through a mechanical process, frequently via a pole inserted through the lid of the churn, or via a crank used to turn a rotating device inside the churn.
Etymology
The ...
, the term is used in many contexts but most widely applied in business with respect to a contractual customer base. Examples include a
subscriber-based service model as used by
mobile telephone
A mobile phone, cellular phone, cell phone, cellphone, handphone, hand phone or pocket phone, sometimes shortened to simply mobile, cell, or just phone, is a portable telephone that can make and receive calls over a radio frequency link whil ...
networks and
pay TV
Pay television, also known as subscription television, premium television or, when referring to an individual service, a premium channel, refers to subscription-based television services, usually provided by multichannel television providers, bu ...
operators. The term is often synonymous with
turnover
Turnover or turn over may refer to:
Arts, entertainment, and media
*''Turn Over'', a 1988 live album by Japanese band Show-Ya
* Turnover (band), an American rock band
*"Turnover", a song on Fugazi's 1990 album '' Repeater''
*''Turnover'', a Japane ...
, for example participant turnover in
peer-to-peer
Peer-to-peer (P2P) computing or networking is a distributed application architecture that partitions tasks or workloads between peers. Peers are equally privileged, equipotent participants in the network. They are said to form a peer-to-peer ...
networks. Churn rate is an input into
customer lifetime value
In marketing, customer lifetime value (CLV or often CLTV), lifetime customer value (LCV), or life-time value (LTV) is a prognostication of the net profit
contributed to the whole future relationship with a customer. The prediction model can have ...
modeling, and can be part of a simulator used to measure