What does the term "churn rate" indicate?

The term "churn rate" specifically refers to the percentage of customers that stop using a company's services within a given timeframe. This metric is crucial for businesses as it provides insight into customer retention and loyalty. A high churn rate may indicate issues with customer satisfaction or the value of the services provided. By understanding churn rate, companies can develop strategies to improve customer engagement and retain their client base.

In contrast, the other options focus on different aspects of customer behavior and company performance. The acquisition of new customers represents growth rather than retention, while product returns relate to product satisfaction and quality. Similarly, customer service response times, though important, pertain to operational efficiency rather than customer lifecycle status.