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churn business definition
- Active trading in a brokerage account in order to increase brokerage commissions rather than customer profits. Brokers may be tempted to churn accounts because their income is directly related to the volume of trading undertaken by customers. Churning is illegal and unethical. Also called burn and churn, overtrade.
- Turnover of customers. For example, a wireless phone company may experience high churn as customers seek the lowest rate. See also customer lifetime value.
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