Stop Customers Churning – 5 Proven Strategies in 2022

It’s no secret that customer churn is a huge problem for businesses of all sizes. In fact, it’s been estimated that the average company loses almost 25% of its customers every year. That’s a lot of money and market share walking out the door!

However, when those potential customers leave, you’re not only losing them, you could be losing out on the customers you would have gotten down the line when they start recommending you to friends and family. By preventing customer churn, you can really boost your return on investment from each of those customers later on.

In this post, we’ll discover 5 customer retention strategies you can adopt in your business today to prevent customer churn. We’ll also look at how to put metrics in place so you can measure these strategies and make sure they’re working for you.


What is Customer Churn?

Customer churn, also known as customer attrition, is simply the loss of customers. Building a healthy customer lifecycle and reducing customer churn can help promote an existing customer base.


Understanding Customer Churn Rate

person measuring customer attrition rate

The customer churn rate is expressed as the percentage of customers who stop doing business with a company during a given period. This number varies depending on what industry you are in and how your company defines churn.

Seasonal markets can have a significant effect on whether your average churn rate is high. For example, a Halloween store is likely to see a huge influx of new customers in the months coming up to the holiday, with a high customer churn rate after. If this is the case, evaluating your churn rate yearly, rather than monthly – might make more sense.


Why Does Customer Churn Matter?

Customer churn is inevitable. There can be a good customer churn rate as well as a negative churn. You don’t expect your customer base to remain as it is since your business began. However, while churn is natural for any business, tracking churn – and knowing why it’s happening – is still important.

Here’s why customer churn really matters:


Dissatisfied Customers Negatively Impact Your Brand

Customer churn occurs primarily because of dissatisfied customers. Customer lifetime value varies, which is why you should do your best to retain existing customers. The goal as a brand owner is to keep your customers happy.


Customer Churn Costs You More

Recent customer churn analysis shows that keeping an existing customer costs less than acquiring new customers. There are different views on customer churn. Some people are of the opinion that customer lifetime value is better than a single cost dimension, like customer acquisition or customer retention.


Customer Churn Can Impact Future Growth

When a company loses customers all the time, it can affect the future growth of the company. Companies reduce customer churn by rendering exceptional customer service to their existing customers first and then to a churned customer who might decide to come back.


How to Calculate Customer Churn Rate

people conducting customer churn analysisMeasuring customer churn at an overall percentage of total customers may not be enough to find proper results. Churn rate can be affected by multiple factors, which is why understanding how to properly calculate churn rate can give you a better picture of your business’ health.


Customer Churn Rates

You can find customer churn rates by simply dividing the total number of customers with cancelled subscriptions over a time period by the the total number of customers at the beginning of that period.


Here’s how to calculate churn rate:

Let’s say you started February with 200 customers, and at the end of the month, you’re left with 150 customers.

Your churn rate will be:

(200-150)/200  x 100 = 25% churn rate.

Studies have shown that average churn rates are everywhere from 2% – to 8%. Therefore, a churn rate of 2% would be considered good.

Note that, a churn rate is a great way to enhance business growth.  It is highly rated as the most important metric when working in SaaS (Software as a Service) companies.


Revenue Churn Rate

Revenue churn rate explains the rate at which lost revenue occurs during a time period due to subscription downgrades. It is calculated by dividing the amount of lost revenue by the total amount of revenue available for renewal at the beginning of a time period.


The Types of Customer Churn

There are two types of churn: voluntary and involuntary.


Voluntary Churn

Voluntary churn is when a buyer actively opts out from patronizing a business. Here, the customer is said to be the one that initiates the exit.


Involuntary Churn

Involuntary churn occurs due to circumstances like payment failure, out-of-date billing information, and so on.


Reasons Why Customers Leave

Many factors can influence a customer’s decision to quit patronage. At it’s most basic, however, customers cancel when they feel like your solution doesn’t solve their problem. The different reasons why customers leave include the following:


Poor Customer Service

Issues of poor customer service or product denies you the opportunity to keep your loyal customers. Note that an exceptional customer service is relative to top-notch customer patronage.

Additionally, churned customers also may turn back to your brand if your services gets better with time.



person using laptop computer holding cardSometimes a customer might feel that the cost of the product purchased or service rendered is way higher compared to the recurring value. While some customers may be bold enough to lay complaints, others will simply revert to a competitor whose price is more cost-effective.


No Brand Loyalty

Customer loyalty is not only about satisfying the need of your new customers, but also that of an existing customer. Offering great service even after a purchase is made will promote customer loyalty as well as reduce churn.


You Don’t Understand Your Target Audience Well Enough

You can reduce customer churn drastically if you understand your target audience very well. Try to understand what your customers want from your brand. The number of customers lost in a business can be controlled if you properly track feedback to understand what makes the customer find your product or service truly valuable.


Your Competition Offers Better Services or Products

Despite brand loyalty, customers can be lured away if your competitors are making more improvements and offering better options than you. Losing customers can be a norm for brands that let their competitors offer better pricing, products, and services than they do on a consistent basis.


Your Market is Seasonal

Christmas ornamentSeasonal markets see a high rate of customer churn when that product or service goes “out of season.” The number of customers lost in the “off-season” can be retained through product expansion and availability of your products in and out of season.


Factors that Contribute to Brand Loyalty 

Let us look at a few factors that contribute to brand loyalty:


Product Quality

If the quality of a product is not convincing enough to retain customers, dissatisfied customers will switch to a better quality product.


Brand Image

If a brand does not maintain its standard, it loses its integrity and ultimately loses patrons. Integrity is one of the capitals in Business. It leads to success. Therefore, let your word be your action.


Onboarding Procedure

The onboarding procedure is a human resource process that concerns introducing new employees to an organization. To reduce customer churn, try to avoid both poor employee onboarding and poor customer onboarding. In employee onboarding, employees are expected to be professionals at customer service. This knowledge can determine customer churn rate as well as identify customer retention strategies.


Service Quality

You can acquire new customers by reducing churn through quality services. Brands that offer poor service to patrons stand the risk of ending a wonderful customer journey. A successful customer walk with a brand happens seamlessly when services satisfy customer’s expectations.



clear glass frameReducing customer attrition can be achieved through promotions. It is a marketing mix that involves advertisement, sales promotions, and personal selling.



No company likes losing customers, and a major factor that can help a company achieve reducing churn is price. Both new and existing companies can retain their customers if they don’t place outrageous prices on their goods and services.


How to Predict Customer Churn

Churn prediction is the practice of analyzing customers’ data to detect customers who are likely to quit patronizing you. Prediction helps in identifying at-risk customers.

A high volume of complaints from patrons is a clear warning sign of churn. If there are multiple complaints on a file, it is safe to assume that they’re at risk of churning. In general, a high volume of complaints is a clear indicator that something is wrong with your product, service, or overall customer experience.


5 Proven Strategies to Stop Customer Churning

Understanding what keeps customers engaged is extremely valuable knowledge, as it can help you to develop your retention strategies and bring back lost customers.

Here are 5 proven strategies that can help stop customer churn:


1. Get a Competitive Edge

Man Holding Chess PieceYour strength lies in your uniqueness and strategy as a recurring business. Be passionate about your brand and make it enchanting. If you can, build something valuable where there was nothing before. Find your biggest edge, force, advantage, or prowess in a business and use it obsessively.

For instance, Google outpaced Yahoo, Bing, etc., to be the number one search engine in the world.

How did Google achieve this?

Google built up great expertise in automated-search technology and Yahoo tried to continue along using human beings to catalog the web,” said Danny Sullivan, founder of the website Search Engine Land. “And by the time Yahoo tried to reverse course, Google had solidified itself as the top search engine.”

Also, Google constantly updates and innovates its search algorithm to maintain its position as the front-runner of the world of search. Thereby making it the most important and most-used search engine for search engine optimization.


Steps to Discovering Your Competitive Advantage

Here are the steps to finding your competitive advantage:

1. Perform a competitive audit – both with marketing and the actual product.

Understand your target market, know who your competitors are, and what percentage of the market they dominate.

2. Talk to your existing customers.

Don’t assume you are updated on your market while the system is on the verge of a change. Being proactive and being flexible will help you retain more customers.

3. Talk to prospective customers. 

Take the time to have a full understanding of your target market and what they want from your brand.

4. Assess your opportunities to improve or develop your competitive advantage. 

Leverage your competitive advantage like special business skills. Reinforce the message in every communication with your buyers, including advertising, public relations, and sales aids.


2. Build Value

The increase in value is theoretically infinite. Do not just sell or render a service, find ways to exceed your customers’ satisfaction.

Invariably, your customers will see that they are not merely paying for a product they can buy anywhere, rather, they are paying for an experience that is unmatched.


Ways You Can Offer Value:

1. Merge price and quality.

Bringing together these two aspects gives buyers true value for their money. Give top-notch quality at a customer-friendly price. Try to strike a balance with your quality and price —let them meet in the middle.

2. Render faster service.

Customers love it when they are attended to faster. Traffic whether offline or online is a turnoff for customers.

3. Offer surprise discount.

Surprise your customers sometimes by giving them discounts. This shows you have their interest at heart and helps increase their loyalty

 4. Occasionally find ways to improve your product/service packaging or design. 

You can as well increase its value by simplifying its method.

5. Learn to speak your customers’ language.

You have to communicate to your customers that they are you #1 priority through both your words and your actions. Learn to communicate, listen, and act.

 6. Make your product/service friendly and easy to access.

This includes making your website easy to use on all devices, making payment a seamless process, etc.


3. Optimize Onboarding

If your onboarding process doesn’t immediately showcase your product’s core value, churn can occur. Keep the onboarding process focused on benefits. Do not make it sophisticated.

Limit the number of steps involved and get your customers to have an awesome experience doing business with you. Customer onboarding should begin as soon as a sale or service is made. Get on immediately with it, do not hesitate.

Your customer needs to know what’s in store for him when doing business with you. And you as the business owner need to know your customers’ response after a purchase or service is rendered. If the response is positive, you are good to go. If it’s negative, then you need to step up your game.


Best Customer Onboarding Practices:

1. Know expectations of your target audience and fulfill them.

2. Customize the experience, make it an engaging one that your customers will always long to have.

3. Gather as much data as you can; on your product/service as well as your customers’ needs and wants.

4. Focus on customer relationships and not just on revenue. A good relationship with your customers will speak well of you and be more likely to draw customers to your business.

5. Be open to communicating with your customer.

Also, you must ensure to monitor employees’ performance. Hire the right people and build a great team.


4. Implement Frequent Check-Ins and Feedback Sessions.

black and white printed textileYou know that occasionally rolling out feedback surveys is important to monitoring customer satisfaction levels.

However, you can also use surveys to understand customer churn by simply asking why they’re leaving.

Send personalized emails to ascertain their reason for churning. According to Groove, its customer churn rate was reduced by 71% by sending emails asking their customers for valuable feedback while leaving.

In-app messaging can also help you get accurate customer feedback.  You can push in-app messages to your customers when they are engaged in a process and ask them to pin-point the exact cause of leaving.  This will help you understand the reason for customer churn and know how to tackle it

You can also try other effective options like live chat for collecting customer feedback in real-time


5. Introduce Incentives and Creative Loyalty Programs

It is not just enough to have a loyalty program for your customers. Why? Because almost every business is into loyalty programs. You need to stand out from the crowd by creating something different and engaging.


What is a Loyalty Program?

A loyalty program is meant to create repeat customers and increase customer lifetime value for your business. Don’t just choose any kind of loyalty program. Let it reflect what you stand for and represent. Align your loyalty program’s values with your brand objectives and values for effective yield.

You can also choose to reward your customers on their celebrations. Like birthdays, marriages, and so on. Whatever will create a lasting impression on them is key to gaining their loyalty.


Types of Loyalty Programs

Your existing customers will enjoy your loyalty program more if you choose one that is suitable for your business niche. Some of the loyalty programs include:

● Punch Card Programs

● The Sill’s Green Rewards

● Tiered Loyalty Programs (e.g Sephora Beauty Insider Membership)

● Starbucks Rewards

● Amazon Prime

● Virgin Red

● The North Face XPLR Pas.

● REI Co-op. US$20 for lifetime membership

● Kohl’s Rewards — featuring Kohl’s Cash

● Walgreens Balance Rewards, where shoppers receive back 10 cents for every $1 spent on purchases.

● Nike+

Gordon Tan

Gordon Tan is an entrepreneur based in Australia who has started and sold multiple technology companies with a combined value of $150m. This included a client satisfaction benchmarking platform which gave him first hand insight into the best practices of over 6,000 businesses. After retiring at 35 he is now a recognised thought leader on winning and retaining clients - His two passions: making clients the heartbeat of a business no matter what the product or service and this blog.

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