Glossary

See customer churn.

Customer churn is a short version of ‘customer churn rate’, or ‘customer attrition rate’, and it measures the percentage of customers who stop buying from their existing supplier in a given period. Customer Retention Rate measures the same characteristic by measuring retained rather than lost customers.

These metrics are especially important in market segments dominated by subscription sales. Customer churn – the percentage of customers lost – is usually analyzed into those customers lost to competitors, and those who simply stop using a service.

See Order Fulfillment Lead Times.

Customer Leadtime is the time elapsed from receipt of an order until the finished product is received by the customer.

Customer Lifetime Value (CLV) estimates the total revenue a customer is expected to generate over their entire relationship with the company.

Customer Reject Rate is a quality measure, expressed in parts per million (ppm), reflecting the number of completed units rejected or returned by external customers. Calculation should include parts reworked by customers. The term applies to all shipped units, including parts.

Customer Relationship Management (CRM) systems are IT systems which manage customer information. CRM systems may: track orders, analyze sales performance, manage customer details (like contacts, discounts and billing information) and automate many routine aspects of marketing – like customer segmentation, follow-up emails, monthly newsletters, and other promotional mail outs.

Customer Retention Rate (CRR) is the number of customers active at some point in the past and still active, divided by the total number of customers at the same point in the past.