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Question 103 - CBDA discussion

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From a prior analytics study, a telecommunications company has concluded that due to the maturity of the market the cost of obtaining new customers is on the rise. As a result, the company wants to increase their efforts on retaining customers. One of the key performance indicators that will help them track their progress in this area is the rate at which customers leave/unsubscribe from their services over a given time period. Which performance indicator is this referring to?

A.
Subscription rate
Answers
A.
Subscription rate
B.
Acquisition rate
Answers
B.
Acquisition rate
C.
Churn rate
Answers
C.
Churn rate
D.
Retention rate
Answers
D.
Retention rate
Suggested answer: C

Explanation:

Explanation: According to the Introduction to Business Data Analytics: A Practitioner View, churn rate is a measure of customer attrition, or the percentage of customers who stop using a product or service over a given time period. Churn rate is an important indicator of customer satisfaction, loyalty, and retention. A high churn rate implies that customers are dissatisfied or have found better alternatives, which can negatively affect the revenue and growth of a business. A low churn rate implies that customers are satisfied and loyal, which can positively affect the revenue and growth of a business. In this situation, the telecommunications company wants to increase their efforts on retaining customers, so they need to track their churn rate and try to reduce it.

asked 18/09/2024
Marcelo Rubio Caiado
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