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Insider Tips for Reducing Customer Churn You Probably Don’t Use

Many marketers spend their time focused on generating traffic and leads, but that time is often reactionary. There is a need to constantly acquire new leads if a business is failing to keep its existing customers happy and returning for repeat business. As a full-service digital agency, we have always felt that more emphasis should be placed on not losing customers in the first place and to help we wanted to share our Insider Tips for Reducing Customer Churn you probably don’t use.

Profit in business comes from repeat customers, customers that boast about your project or service, and that bring friends with them. ~W. Edwards Deming

What is Customer Churn?

Customer churn for most businesses is the enemy. Customer churn by definition is when customers or subscribers stop doing business with a company. Often this is represented with the “churn rate” which is the percentage of subscribers or customers who discontinue subscriptions, service, or doing business within a specified time period.

For example, if you had 500 customers at the start of the quarter and end with 400, your churn rate is 20% because you lost 20% of your customer.

In an ideal world a business would have a churn rate of 0%, but of course that is unrealistic. Customers will move, pass away, or no longer need services. However, those who do none of those things and simply find another business to fulfill their needs are the people that should be focused on.

While obtaining new customers and leads is always a wise proposition for a business to fuel growth and offset churn, there also needs to be a certain amount of effort made to reduce churn and increase customer loyalty. The numbers don’t lie; it can cost anywhere from 5 to 25 times more to find a new customer than retain an existing one depending on the business. Even on the low end, that is an expensive proposition.

Tips for Reducing Customer Churn

  • Understand churn in your business – Every business is different and therefore churn will occur for assorted reasons. Simply guessing as to why customers are leaving is not enough; take the time to analyze and understand churn as it happens and then use that information to better formulate the preventative actions your business will use to reduce it.
  • Create feedback loops – Regularly obtaining customer feedback can not only provide insights to pain points that might cause churn but can also let customers know you care about their opinion. Additionally, the more often you obtain feedback at various stages allows for a more detailed understanding of issues rather than the general answers that are often obtained in generic surveys. Amazon sets a very good example with their customer feedback process after a purchase where they ask specific questions to focus on certain aspects of the transaction that typically are problem points.
  • Offer additional education – Providing more for less is always an ideal situation from the customer standpoint. There are numerous ways to do this such as providing a more in-depth onboarding experience, offering free training, providing product demos, or even creating video tutorials. Don’t just sell them the tool; offer the training to use that tool efficiently and effectively.
  • Show customers you care – There is a significant difference in acting and reacting in business. Taking the time to connect with customers and actively showing them, you care is very different than reacting to a customer complaint or concern with care. The former is not very common, and the latter is somewhat expected. Take the time to regularly contact customers to show you care about their experience as well as offering perks and providing them value to show that they are valued.
  • Provide incentives – There are numerous ways to offer incentives to customers than can go a long way towards building loyalty and increasing satisfaction. Unique promotions, special contests, discounts, loyalty programs, and the like are ways to show people you value their business. These can be also utilized in a manner to add value on the customer journey. For example, if your business is subscription based you might offer a valued customer 20% off if they renew on a two-year agreement when they have a few months remaining on their current term. What are your customer’s needs and how can you add an incentive that correlates to that need?
  • Don’t overlook your best customers – Customers who have proven to be loyal and are considered high-value or extremely profitable should not be overlooked when it comes to churn. As they are your best customers, the loss of each one is magnified when it comes to profits and loss. They can and should be treated even better than an average customer for that reason to ensure you keep their business and repay that loyalty.
  • Provide better service – On the one hand this idea is a relative no-brainer. The most obvious ways to keep customers happy is by providing great service. Yet, it is constantly overlooked for tips that are easier to implement. Customers dislike waiting, rude interactions, and people who are inept at meeting their needs. Take the time to train up staff in customer contact positions to provide better interactions and service and watch as that churn rate goes down.

The Bottom Line

The bottom line is that churn is a word that most people don’t like talking about, however, it is also something you can’t ignore. Our insider tips for reducing customer churn you probably don’t use offer some excellent ideas and thoughts about ways to retain those valuable customers which can mean increased profits and reduced costs spent on the acquisition of new customers just to maintain your business, when instead that acquisition should be helping your business grow.


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