Churn and attrition are two distinct business terms that reflect the rate of customer turnover or decrease in employee numbers. Churn rate indicates the number of customers who have stopped using a company’s product or services during a given period, while attrition rate is used to measure the reduction in staff numbers over time.
Churn rate reflects customer dissatisfaction with a product or service – it’s often seen as a key performance indicator for companies looking to increase their customer base. Attrition rate, on the other hand, is a measure of employee performance; it’s used by Human Resources teams to understand how many employees leave the company each year and why. It’s important to be able to differentiate between them, because understanding both can help you make better decisions when it comes to retaining customers and staff.