Seven strategies to reduce customer churn


You might be happy as a clam getting new customers regularly, but what if we told you that your business can thrive even more by retaining customers?

The rate at which you lose customers within a time frame is called customer churn, and although it’s not the most exciting number, it’s definitely one of the most important. 

Simply put, it costs more to attract a new customer than to keep a current one, and furthermore, you are more likely to sell to a returning customer than a new one. If we’re looking at statistics, Harvard Business School states that an increase of 5% in customer retention rates can increase profits by 25% – 95%. 

Reducing customer churn can drastically improve your business, so let’s get stuck into how you can actually achieve this. 

Firstly, we need to calculate the customer churn rate. There are different ways to calculate churn rate but this is one way:

  • Decide on a time frame and count how many customers you’ve lost in that time.
  • Divide the number of customers lost by your total number of customers. To turn it into a percentage, times the result by 100. 

For example, if you have a total of 20 customers and lost five in a month, your customer churn rate is 25%:

(5 / 20) x 100 = 25

So now you know your customer churn rate, let’s focus on some strategies to reduce it. Luckily for you, this article details seven ways to do that.

Analyse why customers leave

This may be the most obvious starting point, but it’s also the most logical. The only way you can start reducing customer churn is by analysing why customers are leaving, and take action based on the results. 

There are multiple ways you can find out why customers have left, such as:

  • Sending a survey – this can be automatic, i.e. when they leave a service or unsubscribe.
  • Sending a personalised email – this shows that you care more and may result in more detailed feedback. It might sound time-consuming but can also be automated using a platform like Outbase. Find out more.
  • Calling them – talking to your customers (literally) will guarantee the best results, as well as showing them you really care about their opinion. But it can take up a lot of time.

Improve customer service

High quality customer service is vital to retaining customers, and thereby reducing churn. With so many different communication channels, customer service is no longer purely about phone calls. It’s about live web chats, social media messaging, and emails.

If a customer isn’t thrilled with your customer service, it could be enough of a trigger for them to leave as there may be someone else out there doing exactly the same thing but offering better service. This could mean investing in some new resources, or taking some extra time with customers, but it will all be worth it when they stick around. 

Show customers you care

Sometimes we forget about how current customers as we’re so focused on getting new ones. But retention is just as important. Beyond customer service, there are some things you can do to show customers you care:

  • Offer discounts or free samples
  • When emailing, make sure it’s personalised and doesn’t sound automated (remember, you can always use a platform like Outbase that has 37 personalisation options to ensure your emails always feel 121)
  • Engage with customers, particularly through social media
  • Remember details, whether it’s their name or preferences and include those in your communications (again you can include details like this using personalisation options when uploading your email templates)

Create a community 

Leaving a community is much harder than leaving a business, simply due to the collective atmosphere. It may take some time to build up a strong community, but there are multiple types to fit any business:

  1. A Facebook or LinkedIn group
  2. A members-only section of the website
  3. If you have a physical store, host an event 
  4. If possible get involved with the local community – whether that’s online or IRL

Another plus is that, by nature, ideas and opinions spread through communities very fast. Even if you don’t have your own community, making an effort with the community you are in will retain customers. 

Focus on valued customers

Let’s be honest, you probably have some customers that you really don’t want to lose. Every company does, and it’s by separating these customers from the rest that you can really start to see the difference. This is because if you segment your audience into groups of how likely you are to retain their custom,  you can treat them differently. Customers who are most likely to leave might need extra care and attention. 

Provide something new

Customers love a company who can adapt based on the circumstances, and who are always improving their services and bringing out new things. New feature updates also make room for new campaigns and building brand awareness. The key to a great feature update is to make sure you inform all your existing customers and explain exactly what it is and how it works. 

Define the journey

If you are gaining new customers but not keeping them, you may want to rethink your newcomer roadmap – that is, the route you want new customers to take to become returning customers. Show them how to use the product to its fullest, as well as providing an easy way for them to contact you. 

For example, when you first open our platform, there are automatic pop-ups showing you how to use the basic functions, and guides you through setting up your first email campaign. This makes your platform or website easy to use and ensures customers know what they’re doing. You won’t retain customers if your product or service is hard or confusing to use. 

Alternatively, you could send a personalised email to them with this information, perhaps telling them the most recent improvements based on feedback. This subtly communicates that you’re constantly working to improve the product, and value customer feedback. 

Customers always have and always will churn; that’s just a fact. But if you can have some control in the matter and reduce your customer churn rate, not only will your business succeed even more, but you’ll also have happier customers. 

Just as calculating customer churn has a specific formula, so does reducing it…

👉 analyse why customers leave, and make changes based on that information. 

Retaining happy customers can often result in more customers due to referrals, so reducing customer churn can even help your business grow.  Outbase can help reduce your customer churn rate by providing a steady stream of new business.

Skyrocket your sales today

Written by:
Lily Ruaah Content Writer