Q

What does "churn" really mean?

What is the origin of the word "churn" and can you give an explanation for how/why we use it in relation to customer loyalty?

Churn is another term for customer turnover, or defection, from a supplier; but, it's also used to represent 'turnstile', 'revolving door' or 'leaky bucket' customer flow, where there's continual pressure on Sales to maintain a flow of new customers (i.e. acquisition) because there is an equal, or greater, flow of customers who are lost. Churn, turnover, defection, or loss - your choice of words - typically occurs because the original supplier has provided an insufficient level of value, as perceived by the customer; and the customer elects to find another supplier more suited to his/her needs.

The term has been applied within the marketing community for decades, so far as I'm aware. It's most prevalent use is in industries like retail, telecom, and banking/financial services.

For more information, read my "Lessons in Loyalty" column:"Model modelers in predictive churn"

This was first published in July 2002
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