What can you do to decrease your customers' churn rate and salva sales

May 20, 2024

Churning customers is taking a chunk from your profit margins? Read this complete guide to discover reasons why your churn is too high, and what you can do to reduce it down.

Churn bites.

It doesn't matter who you are or what industry you're dealing with, losing customers-- a.k.a., having them churn -- is fast kick in the financial gullet.

It's normal, and no matter what someone says, it's there is no way to get rid of it completely.

There are methods to keep your customers around for longer and cut churn down as well. In this post we'll cover the most common ones.

Even better, each of the subjects that are covered in this article can help reduce the rate of customer churn and encourage further revenue from each client.

Yes, we offer you ways to improve customer retention, and convert your members at risk into loyal customers with an improved life-time worth.

Like always, we should begin by getting everyone on the same page and examining what customer churn is and some of its potential causes.

What's the cause of customer churn? And how does it hurt your company?

Simply said, customer churn -- also known as customer attrition -- refers to the time when customers cease buying at your company.

It's more specifically that customers cease to purchase often, as they do with regular memberships.

One of the main reasons it's a huge risk to your business is customer turnover, which is a drain on your pocket and in the short and longer-term.

When it comes to the short-term goes, a customer may quit before you've earned some of your costs for customer acquisition (CAC). If you're not familiar, CAC includes costs like your investment in marketing efforts or tools you used to earn an individual's company.

Unfortunately, earning back the cost of your CAC purchase can be an ongoing struggle. This is the situation for both B2B and B2C companies from 2013 to 2018. anyway, where CAC has increased by almost 50 percent .

As for the long-term the long-term, customers who keep churning will probably never purchase from your business again. They're likely to not introduce prospective customers to your business, either -- each of these could negatively affect the earnings you can expect to earn in the future.

Considering the power of word-of-mouth marketing, this is the biggest blow you can deal with on your bottom line.

Not everything is doom and despair.

For some good news -there are methods to cut down on customer's churn rate and to get in an excellent rhythm of earning regular monthly recurring revenues (MRR).

To get there, you need to first calculate your the churn cost  to know how much churn is costing you.

This can be done simply by subtracting the amount of clients that you've got at the conclusion of the period (say 1 month, or one quarter) from the number of customers that you had at the beginning of the month or quarter.

Then, divide this total by the number customers at the beginning of the period.

As an example, say you have 500 customers on January 1 and 450 on March 31. Based on the calculation of churn rates, (500-450)/500 puts your quarterly percentage of churn at 10 10%.

From there, you can use this customer churn calculator to understand how much customer churn is taking away from your business.

Be gentle with yourself when your customer's churn rate is higher than you expected.

Subscription businesses have an average churn rate of 5.6 percentage  The rates can vary between businesses.

For a small-sized business that has only a few resources to cut down on churn, it's not unreasonable to have a churn rate that's slightly above the average.

This is the case for newly established business. The reference point above -- the golden 5.6 percent rate originates from companies in the later stages. If you have only just a handful of customers the beginning, your churn rate can and likely will be much higher and more unpredictable.

While you are working to reduce your customer churn as you progress, you'll begin to see your churn rate get closer to -- or below -- the 5.6% average.

In terms of how to make what works, it starts by understanding your root causes.

Reasons why the churn rate of your business is too high

Customer experience is a negative one.

There is a mismatch between your advertising and product

Not staying ahead of your rivals

Less-than-stellar customer engagement

Let's examine the customer experience in the first place.

A lot is riding on delivering a positive user experience. 73% of users believe that customer service to be important when making purchases.

Plus, 65% of consumers also consider a good customer experience as more effective than good advertising.

I.e., if your clients don't feel appreciated or have a difficult time using the product, that they'll not stay with you for the long haul.

It's no surprise that a bad customer experience can result in more than shoppers running for the hills. 32% of shoppers will leave a brand they love when they have a bad experience and, sadly, only 49% believe that businesses provide good customer service.

Another reason customers lose interest could be that you are attracting those who are not your ideal customers.

Let's take an example, for instance. you provide a class on writing best-selling mystery short stories. If your marketing campaigns target first-time Indie writers, there's a high likelihood of not matching your potential customers to the online courses you offers.

Or, similarly, there may be a disconnect between the values of your (former) customers and brand value.

After all, 1 in 6 consumers stop purchasing from a business because the brand's values don't align with their personal ones.

The bright side is However, 35% of consumers tend to purchase from brands that are in line to their values, after purchasing at least the first time.

The third reason for why your churn rate may be higher than you'd like is because you're not keeping on top of your competition. If customers think that other brands offer more value than your own, then that's an excellent reason to drop your company.

38% of consumers said they get more quality for the money they spend as a reason for selecting the latest brand or product.

Plus, another 20% choose other brands' products due to their quality or functionality.

Naturally, there might be nothing wrong with your brand and your clients may simply like to be able to choose from a wide range of choices.

This is so common it is seven-thirds of consumers would be willing to look at the possibility of a brand new in at least one of the categories as well as 70% of shoppers consider two to four businesses when making a buying decision.

In addition, 36% of people just love to try new products.

Another reason that your customers are ditching your brand could be because or their disengagement.

In one instance Bonjoro found 80% of their turnover was from users who did not use their service or people who bought their services before they had gotten any value out of the service (and going on to leave shortly thereafter).

Furthermore, if you don't have a solid idea of the reasons the customers are turning away and why, this can lead to even more customer churn.

The best method of finding out the reason the customers who have joined your membership is to ask them directly. Then you can address it, just like Getsitecontrol did.

In the process of analyzing their clients' feedback from the quick questionnaire on pricing, which they published on their website and on their website, they cut down their subscription price from $19 to $9 a month. They also saw an increase in customer lifetime, a reduction in churn and customer lifespan increase.

Similar to that, Usersnap inquired of customers on their unsubscribe page why they were churning and assessed customers' responses. They then created another service line which led to increasing the number of customers who kept their accounts longer.

All in all:

Customers are leaving your business due to a myriad of reasons, including poor customer experience and a mismatch between the audience you target and your the brand, or offering, and letting your competition succeed or a lack of interest.

The gathering of customer feedback and asking your audience specifically why they've left your company is the most accurate method of determining what's to the blame.

The ideal scenario is to take this step before your clients are technically speaking, clients. Let me explain.

Convert trial users to free trials with above-the-curve onboarding

For this, encourage your trial customers to a sale during their entire trial time and you will have a great possibility to help your customers fall in love with the brand you represent.

The first and most important thing is to provide worth.

It's something you could perform right from the beginning of the onboarding process. For instance, in this onboarding email from Glitch  and Glitch, which suggests two things for users who are new to start with. The email also provides a few tips to use their service, and showcases the apps through their platform.

On top of that, Glitch likewise links to their help centre and their customer support forums at the bottom of their emails.

You can follow in the footsteps of Glitch and provide the new users of your trial valuable information as well as guidance and assistance in an onboarding email. This will help them get immediate benefit from your company.

If you do, you'll satisfy most consumers.

77% of those think that companies should offer value-added information to their customers think companies should offer information on how to get the most value out of their product.

Additionally, 73.4 percent want to know more about the various methods to use the products of a particular brand.

The lesson? The customers want to understand how to succeed with your product Therefore, provide them with everything they'll need.

For instance, Lowe's sends an email to their unenthused customer base to let them know what has changed, and improved, during their absence.

It also encourages users who aren't active to visit a brand that seems to be attractive, new, and improved.

Another effective method to turn trial users into customers is by offering discount and incentive programs.

Probably painfully obviously, customers love discounts. So much so that nine out of ten consumers say they'd make repeat purchases when a brand offers good discounts.

Offer trial subscribers a discount on an email that welcomes them, as Charles Tyrwhitt does in his welcome email, which offers new subscribers the chance to save 20.

You can also use Airbnb  and its model, where they give a coupon in conjunction with the benefits of buying their offer, like this email with an offer of $200 and advantages of checking-in for 24 hours and local wines and food.

Basically, the best way to cut down on churn follows the same logic as the ideal method of applying medicine:

An ounce of prevention is more than a pound cure.

Start early and give your test users that additional push they require, and provide value from the beginning.

You can do this, and before you know it the churn rate of your business will be dropping as well. If you utilize the techniques in our next section, you'll have the chance to see it happening in (almost) live-time.

Tools to track, manage the churn of customers and stop it from happening.

The most effective churn tool can assist you in keeping customers providing one of four things:

Failure to recover payment data

Customer insights


Information on the customer's success

Are you wondering how crucial analysing your customer's insight and data is when it comes to decreasing your customer's turnover?

Answer: quite.

The right metrics, reporting, and analytics in place will help you pinpoint where the growth issues are.

90percent of analysts and business experts say that analytics and data are essential to the success of their company's digital transformation plans.

Granted, they'd be out of a job if they didn't say that there are a lot of people who make smarter decision based on the data they have.

What do you have to choose from?

It's time to look at failed payment recovery tools. We recommend the Churn Buster  that can help to identify passive churn that has resulted from failed payments.

Churn Buster's main focus is the failure of payment recovery in ecommerce, SaaS companies, and digital subscription businesses.

If you're looking for a tool to help uncover customer insights look into YesInsights , which is a platform that reduces customer turnover by providing satisfaction surveys.

Conversely, tools like FirstOfficer , a subscription analytics application, allows you to track and analyze your company's growth challenges.

This app allows you to track the churn of customers by analysing the metrics of your subscription for payments made through Stripe.

In addition, if you're looking for a tool to help you with analyzing customer success and satisfaction information, look to tools like ChurnZero .

ChurnZero is a real-time customer success platform that provides subscription-based business insights (like membership sites) on product usage and the health of customers. These are key indicators to monitor if you want to keep your customers active and satisfied.

While all these tools can be, there will and will be customers you can't get rid of -- and a few are likely to demand refunds.

However, that's never the case.

Actually, it's an possibility.

How to create and execute the policy of refund that is sold

Contrary to what you might believe, nothing is lost after losing a customer or requesting a refund.

Making a smooth return and refund policy experience may encourage customers to purchase from you again in the future, and decrease the chance of them abandoning your company altogether.


In fact, 95% of shoppers believe that how the company handles return policies affects whether they purchase from them again.

Furthermore, 96% of customers think they'd shop with an organization again if they had the "easy" or "very easy" returning experience with the firm.

Furthermore, whenever a customer asks for a refund, it's an opportunity for you to suggest a different product that would be an ideal fit.

How do you turn an unrefunded request to a sales opportunity?

If you recommend a product the best fit for the customer you can show your customer how much you value their happiness and success and have taken care to take review of their individual needs and preferences.

I.e. You get the opportunity to stop the process before it happens.

To capitalize on this fantastic possibility, develop a policy that first looks at the conditions under which customers can receive refunds, asking questions such as:

Will you have a no-questions-asked policy? Or

Does it matter if an individual has been a paying member for a set number of months that they will be eligible to receive an amount of money back?

Additionally, you can also offer a credit or an exchange to a purchase, but you should only consider a refund in cases where no other options are desirable to your customer. The main point is to clearly define your refund conditions and then, hopefully obviously, stick to the terms.

If you want to see the way this can work for creators, take a look at Creative Strategies , who offered refunds to customers who purchased a digital product but did not download the product. Requests for downloaded products are assessed on a case-by-case basis.

Once you have set your terms The next step is to decide on how long you'd like to provide the possibility of refunds (i.e., Two weeks? A month? An entire year?) Then, you can decide on which of the items your refund policy applies to.

The refunds might not be applicable to subscriptions that are monthly, for example however, they may be suited for ebooks and online classes. You may also be willing to refund the annual fee in the event of unused membership months.

If you're wondering how to begin, you can use templates or the Generator for refund policies as a jumping point in the process of creating your policy.

You can then modify the template in order to match your branding and to address your company's specific policies and situations with customers.

No matter if you're using a template or not to get started, be certain to draft your policy in clear and transparent language, so that your clients are able to comprehend.

After you've got the policy in place then, make it available on your site so that your clients can quickly find it.

This is a significant detail considering 33% of shoppers claim they won't buy at a store if it's difficult to find a business' return and exchange policies.

To that end, it's wise to have a standalone page that houses the policy on refunds.

Marie Forleo , for example, has an additional page dedicated to her business' Terms and Conditions  as well as the policy on refunds.

To be extra explicit to be more explicit, send an email with your policy regarding refunds once your clients have made a purchase.

This way, you are able to either quickly offer a return or suggest a new product and minimize any potential issues your client might face.

This is a win-win for you and your customers by not only giving them the best possible service as well as letting your customers know that you've thought about their needs and perspectives that could motivate them to complete future purchases.

Cut down on your customer's churn by using our tips for burning churn

While avoiding customer churn altogether is impossible, it is possible to reduce churn. are methods that have been proven to reduce your churn rate.

To beat the churn of customers, here's a recap:

Churn occurs when customers quit your company. It's not good for your company but you are methods to increase the retention rate of your customers and decrease the churn rate.

The reason for customer churn is many factors, like a bad customer experience, a misalignment between your brand and its audience or offers, offering lower quality than the competition or having a lower amount of engagement from customers.

For you to turn your trial customers into lifetime customers, offer them instant benefit, assistance to experience the benefits of your product, re-engagement messages, and discount incentives.

Software like Churn Buster, YesInsights, FirstOfficer, and ChurnZero assist you in analyzing the data of your customers, monitor your churn indicators, and proactively take measures to cut down on the amount of churn.

By drafting an easy-to-understand refund policy that's easily accessible for customers and allows for a hassle-free experience, which can turn churn into opportunity. This is the "you miss every shot you don't take" approach to the churn process.

With these tactics available now is the perfect time to put your fear of customer churn to one side and implement your strategy to fight churn today. Avengers, I'm talking about creators, friends -- come together!