9 Efficient Strategies to Reduce Customer Churn

Reading time8 minutes
Jaqueline Corradi
Jaqueline Corradi
Content Manager

Learning how to reduce customer churn is a challenge companies of all sizes and sectors must face. It's fundamental to understand why customers stop buying from your brand or requiring its services. 

Usually, customer churn is a sign of unhappy customers. But, what is making them unsatisfied? If you don't address this question, you risk losing even more clients and hurting how people perceive your brand. 

Fortunately, this can be avoided. Check the article to learn more about it. 

What Is Customer Churn?

Customer churn can be defined as the number of customers who stop buying or using your company's services in a period. It's a relevant indicator of your business's capability of retaining clients and creating effective strategies to build a strong base of loyal customers.  

If a company has a high customer churn rate, it can damage the brand reputation, and make you lose sales and profit less. It's important to keep track of customer relationships and make continuous efforts to enhance them. 

How to Calculate Churn Rate

To calculate the customer churn rate, you need to divide the number of lost customers by the total of customers in a specific period, then multiply the result by 100. For example, let's suppose you started the first semester of 2023 with 1000 customers and lost 235 customers by the end of this period. 

The churn rate was (235/1000) x 100 = 0,235 x 100 = 23,5. Therefore, the churn rate for the semester was 23,5%. 

Why You Should Care About Customer Churn

You must pay attention to the customer churn rate because it's directly related to retaining customers and being able to build a strong relationship with them to conquer their loyalty. If you aren't able to keep customers for a long time that's a problem as it probably indicates a high level of dissatisfaction regarding your products and services.

In the long term, you can have significant losses if not able to reduce customer churn. The customers you lose may leave bad customer reviews, and recommend your competitors, for example, preventing you from acquiring new clients and even tainting your brand's reputation. 

Another disadvantage is the cost to attract new customers. According to Forrester, it costs 5 times more than keeping the ones you already have. A Harvard Business School report explains that, for example, if you have 5% increase in customer retention, you may profit 25% to 95% more. Learning how to reduce customer churn helps not only to keep your revenue but to enhance it. 


Causes of Customer Churn


The price of the product or service is a common cause of customer churn. If you raise the prices too much, clients may cancel a service or stop buying from your brand. But, this happens mostly when they don't see that what they receive is worth what they pay.

Therefore, it's fundamental to guarantee you are offering an incredible customer experience, along with high-quality products and services. Show your target audience why they should pay what you are charging them, and give them irresistible reasons to choose your company. 

Product/Market Fit

Another problem that can end up in customer churn is when you haven't defined well who your target audience is. If you are focusing on the wrong group of people to buy your product, they may not see the value of your products and services. 

User and Customer Experience

Customer retention isn't only about the product and service quality and price, it's strongly connected to how good the user and customer experience is. If you don't provide effective assistance to your leads and customers, hardly ever they will choose to buy from you. If they do, likely, they won't repeat the purchase, and look for a company that invests in making them feel heard and valued. 

10 Strategies to Reduce Customer Churn

1. Analyze Customer Churn Reasons

Undoubtedly, the most important strategy to reduce customer churn is to investigate the reasons why your clients stop buying from you. Try to identify patterns, in case of unsubscription, send an email asking why the person is canceling the service. 

Once you identify the customer churn cause, it will be much easier to create an effective plan to avoid losing more customers. It's about knowing your customers, understanding their pain points, and working continuously to make sure your products and services can help with their demands. 

2. Engage With Your Customers

One of the main reasons customers become loyal to a brand is how they feel about them. It goes beyond offering low prices and good products, it's connected with the emotions and feelings your brand evokes. 

You should implement actions to build a close relationship with your customers, and that means actively engaging with them. Social media platforms like Instagram and Facebook are great assets to straighten the bonds with your target audience, you should enjoy their potential. You can also send messages inquiring about customer satisfaction, and give special discounts to loyal customers, for example.

3. Educate Your Customers

Educate customers about the products and services you offer, show how to use them, and how they can be helpful to your audience. For example, if you are a software as a service (SaaS) company, your software may be incredible but it won't be appreciated properly if your customers don't know how to use it.

You can solve this problem by developing an onboarding process, offering video tutorials, sending articles explaining the software features, and creating FAQs. This is the same for any other company, producing material that highlights the functionalities of your products. 

4. Identify Who the Customers at Risk Are

Another strategy to prevent customer churn is identifying who are the customers that are most likely to abandon your company and creating actions to engage with them. However, to do that, you need to keep track of your customers and follow their steps closely.

It's important to develop a system that enables you and your team to have an accurate understanding of each customer. Counting on tools like customer relationship management (CRM) will make a huge difference in that. 

5. Offer Encouragement to Keep Customers Satisfied

Why should customers keep choosing your company over and over? That's a key question when it comes to reducing customer churn. You need to have very clear what advantages and benefits your company offers, then use that to encourage your customers to buy.

But, beyond highlighting your product and service qualities, customers like to feel appreciated and receive other motivations. For example, coupon discounts, free shipping, and gifts. This makes them feel special, so try to invest in those strategies.

6. Don't Ignore Complaints

If you receive any complaints from your customers, pay attention to them, and instruct your team to solve them as quickly as possible. If many customers are complaining about the same thing, this is a strong indicator that something must be changed in your service to avoid a high customer churn rate. 

7. Pay Attention to the Competition

Watch the competition closely. What other companies are doing to attract new customers, and what advantages do they offer? How can you make your services and products stand out from them? 

Those are all important questions to be answered. If your business competitors offer more benefits than you, you will likely lose clients. When you know your competitors it becomes easier to prevent that. 

8. Ask for Feedback

Hear what your clients have to say and beyond that, ask for their opinion, don't wait for them to stop buying from you to do that. Make surveys, and send messages asking about how satisfied they are with your services and the products they buy, so you can keep improving. 

9. Provide Great Customer Support

Imagine you have hired a plan from a website builder platform to create your website, but your pages suddenly are displayed misconfigured. You try talking with customer support but don't receive any response. That's frustrating and probably a reason to look for another service provider, isn't it? 

Your customers feel the same way when they don't get the assistance they need. To reduce customer churn, it's fundamental to provide great customer support, and you can do that by preparing your team well, and also implementing the best tools that allow customers to easily get in contact with you, and your company to keep track of their interactions. 

JivoChat Can Help You Reduce Customer Churn

Now that you understand how to reduce customer churn, you can see how customer experience and customer support are essential to avoid losing customers. To help you with that, you can count on the JivoChat live chat. With this tool, customers can get in touch with someone from the support team in a few clicks. 

The JivoChat app is easy to use and install on your website. You can set chat buttons corresponding to different website pages, and set up proactive invitations according to the time on site, number of visits, and customer's location. JivoChat live chat is also adapted for mobile devices, and it works on all mobile devices. 

Another advantage is that you can use the JivoChat app to keep track of all customer interactions. It's possible to analyze the audience and get to know who they are, where they come from, and what they are looking for. Enjoy!

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