3 Steps to Avoid Customer Churn

Customer churn, despite being a negative figure, is one of the most important metrics for businesses to evaluate. 

Even large and successful companies have to face up with customers leaving them every day due to numerous reasons. Therefore, understanding what prevents your loyal customers from a relationship with your business is exceedingly crucial to retain sustainable business growth.

What is customer churn?

Customer churn refers to the percentage of customers who stop using your products or services in a certain period of time. The rate can be calculated by dividing the number of customers you lost by the total number of customers you have at the beginning of that period. This number demonstrates how well your business is doing in satisfying your existing customers. 

Says at the start of this quarter, you have 300 customers on your database. If after this timeframe, the system records 12 unsubscribers, then the customer churn rate is:

example of how to calculate customer churn rate

You can also calculate the churn rate in a different way, such as:

  • The number of customers lost
  • The number of recurring revenue lost
  • The percentage of  recurring revenue lost

Ideally, your business should always gravitate towards a 0% customer loss. The reason why keeping your customers aside is so important is because customer retention drives more revenue than attracting new ones. In fact, only a 5% increase in customer retention can accelerate profits by at least 25%. 

However, there are many factors that affect your customer’s intention. So, how to avoid customer churn? 

3 steps to avoid customer churn

1. Analyze why a churn occurs

Try multiple ways to communicate with your customers as of why they abandon your company. In fact, 68% of customers leave because they think the company doesn’t care about them. 

There are multiple ways to talk with your customers, such as:

  • Making a phone call
  • Creating a poll on social media
  • Sending an exit survey when proceeding with unsubscription

These help you gain valuable feedback about what’s going wrong to improve your performance and prevent customer churn from happening again. 

2. Predict who is likely to churn

It’s always better to avoid customer churn from the first place. The idea is to identify customers with certain characteristics that might lead to a churn in the future and pay special attention so as to reconnect them with the company in time.

Among all, there are 2 types of customers who are most likely to churn, which are

  • People you have not been contacted for a while
  • People you forgot to follow up on their questions

After knowing the reasons, you would be aware of the actions that your churned customers made. This can help you head up to other people who are behaving similarly and take care of them earlier. 

3. Use automation to take care of your customers

The best way to stay on top-of-mind with your customers is to constantly engage with them. However, as the number of customers grows, this becomes extremely frustrating. As a result, business everywhere is integrating automation software to help them keep in touch with their consumers. 

There’s no need to manually send a message to every single customer anymore. With automation, you write the content once and let the software do the distribution. Apart from newsletters, you can use workflow to deliver promo codes during special occasions or simply re-engage with them after a time of no purchase. This ensures that customers always receive information from your company.email-customer-to-avoid-customer-churn

You can also use automation to sort out questions, complaints, and refund requests and send push notifications to your staff. This way, you make sure not to miss out on any questions that might disappoint your customers. 

Conclusion

Now that you know the importance of customer retention, it is noteworthy to focus on being a keeper. 

After all, maintaining a strong relationship with your customers is daunting sometimes. It boils down to analyzing reasons for customer churn and coming up with solutions. Communicating with your customers regularly using automation would be effective to keep them on your side.  


Our products and services: Shopify automation, BigCommerce automation, Backorder management
Subscribe to our Blog for weekly articles

Related articles