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Calculating Hypothetical Maximum Customer Capacity
By using a simple equation of new customer inflow and churn rate, one can project the maximum number of customers a business will be able to maintain. For instance, if a business gains five new customers per month and has a 10% churn rate, it can project that the hypothetical maximum customer capacity will be 50. This calculation is crucial for understanding the limitations of customer growth and the potential need to increase new customer acquisition or decrease churn rate to expand beyond the projected maximum.