Glossary / Churn

Churn

The fraction of customers lost each cycle. Its inverse sets expected customer lifetime, which makes churn the hinge of all recurring-revenue math.

Introduced in Chapter 22 — Product Valhalla of Tangibles.

Related terms

• Switching cost — What a customer must give up to move to a competitor.
• Bill of materials (BOM) — The itemized list of every component and material in a single unit.
• Commoditization — The slide by which a once-distinctive product becomes interchangeable with rivals' and loses its price premium — the erosion that connected, software-driven features are meant to resist.
• Autonomy ladder — A staged scale of how independently a connected device decides and acts, from simple monitoring up to closed-loop control — a way to place a product along the Sense-Decide-Act progression.