Attrition Rate
Attrition rate, also known as churn rate, is the percentage of customers or employees who leave a company within a certain period of time. It is an important metric for businesses to track as it can have a significant impact on the overall success and profitability of the organization.
For example, a high attrition rate among customers can indicate that there are issues with the product or service being offered, leading to a loss of revenue. Similarly, a high attrition rate among employees can signal problems with company culture or management, resulting in increased recruiting and training costs.
There are several ways to calculate attrition rate, but a common formula is to divide the number of customers or employees who left during a specific time period by the total number at the beginning of that period, and then multiply by 100 to get the percentage.
Formula:
((Number of Customers/Employees Left ÷ Total Number at Start) x 100)
It is important for businesses to monitor and analyze their attrition rate regularly in order to identify potential issues and take proactive steps to address them. By reducing attrition rate, companies can improve customer and employee satisfaction, increase loyalty, and ultimately drive growth and profitability.
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