820-605 · Question #40
What is a financial implication of churn?
The correct answer is A. loss of revenue. The primary financial implication of customer churn, which is the loss of customers, is a direct loss of revenue for the business.
Question
What is a financial implication of churn?
Options
- Aloss of revenue
- Bincreased production
- Creduced product utilization
- Dcontract expansion
How the community answered
(34 responses)- A94% (32)
- C3% (1)
- D3% (1)
Why each option
The primary financial implication of customer churn, which is the loss of customers, is a direct loss of revenue for the business.
Churn signifies customers discontinuing their service or subscription, which directly translates to a cessation of their payments and thus a loss of recurring or potential revenue for the company.
Increased production is generally an indicator of growth or demand, not a direct financial implication of customer churn.
Reduced product utilization might contribute to churn if customers aren't seeing value, but it is a cause or symptom, not the direct financial implication of churn itself.
Contract expansion is the opposite of churn and represents increased revenue from existing customers.
Concept tested: Financial impact of customer churn
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