Glossary
What is churn?
Churn is the rate at which customers stop returning, and in a local business it is usually silent: customers rarely announce they have left, they simply stop appearing.
Silent churn is the central problem a loyalty programme solves. Without a record of who your repeat customers are, you cannot notice that a weekly regular has not been in for six weeks, which is the exact moment a single message would bring them back. Loyalty software makes churn visible before it is permanent.
Why is churn invisible in a local business?
Because nobody announces they are leaving. A customer who came twice a week for a year simply stops appearing, and in a shop serving hundreds of people a day no one notices one absence.
This is what makes churn expensive. By the time an owner senses that trade is down, the customers concerned have usually formed a habit somewhere else, and winning back a settled habit is far harder than interrupting a drift.
What does churn cost?
For a café serving 500 customers a week at €6 a visit, a five-point difference in the repeat rate is worth roughly €7,800 a year. Against a subscription of a few hundred euros, almost any measurable improvement pays for itself many times over.
How is churn different from a lapsed customer?
Churn is the rate at which customers stop returning; a lapsed customer is one specific person who has passed your absence threshold. Churn is the number you monitor, and lapsed customers are the list you act on.
See also
- Lapsed customer: A lapsed customer is someone who used to visit regularly but has not returned within an expected window, commonly 45 days for a café (the Loonine default, adjustable from 1 to 365 days in the app), or two visit cycles for an appointment business.
- Customer retention: Customer retention is the share of customers who return to a business over a given period, and it is usually far cheaper to improve than customer acquisition.
- Win-back campaign: A win-back campaign is a message sent specifically to customers who have stopped visiting, with the aim of restarting the habit before it is fully broken.
- Purchase frequency: Purchase frequency is how often a customer buys within a period, and its inverse, the typical gap between one customer's visits, is what sets every other number in a loyalty programme.
- Cohort analysis: Cohort analysis groups customers by when they first bought and tracks each group forward, which separates a retention problem from a recruitment one in a way a single overall figure cannot.
Further reading
What customer churn costs a small business
A worked example showing why a small improvement in repeat visits outperforms almost any acquisition spend for a local business.
Why paper punch cards fail, and what to replace them with
Paper loyalty cards lose customers for three structural reasons. Here is what each one costs and how a wallet card fixes it.