8 steps to reduce your churn rate

8 steps to reduce churn rate

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Recurring income , whether monthly or annual, is essential to the overall health of your business. Recurring income has become a popular business model because with a predictable and steady stream of income, you can forecast income months in advance, create budgets with a high degree of certainty, prepare for fluctuations in your cash flow and develop your business in a sustainable way. The biggest threat to a business’s recurring revenue is churn .

Definition of churn rate or churn rate?


Churn rate also known as ” churn rate “, “customer attrition” and “customer turnover” occurs when a customer stops using your product or service and terminates their relationship with your business.

Since your existing customers are the most profitable, you have a 60% to 70% chance of selling to an existing customer, but only a 5% to 20% chance of selling to a new prospect. It is vital for the continued success of your business that you manage and market them effectively.

In this blog post, we’ll cover ways to identify and prevent unsubscribes, but first, let’s talk about the different types of unsubscribes you should be aware of.

The different types of “unsubscribe”

There are two types of unsubscribe:

Voluntary churn : The voluntary churn rate is what happens when a customer actively terminates or closes their account. Customers often voluntarily unsubscribe after a bad customer experience or if a competitor offers a better offer.

Unintentional unsubscription: involuntary unsubscription occurs when a customer’s subscription in a given sector ends unintentionally . Unintentional unsubscribes are more common than voluntary unsubscribes and are often the result of system errors .

It is important to understand the differences between these two types of unsubscribe because, as you can see, they have very different root causes and, therefore, very different resolutions. Since voluntary churn occurs when a customer actively withdraws , resolving it requires a very customer-centric approach: look for opportunities to strengthen customer engagement, improve customer experience, help customers. customers to see the value of your product, etc.

To prevent unintentional unsubscriptions, send reminders to customers when their subscription is about to expire, keep customer card information as up-to-date as possible, and perform regular internal reviews to identify and eliminate any potential system errors. .

How to calculate the attrition rate of your customers?

As cliché as it may sound, the old adage “You can’t manage what you don’t measure” is very true, especially when it comes to the rate of attrition. Before you start building a customer retention strategy and implementing best practices, you first need to know exactly what you’re tackling.

You can measure the churn rate by calculating your customer attrition rate. The “customer churn rate” is the percentage of customers or subscribers who abandon your services during a given period.

Calculation :

Churn Rate = (Number of active customers at the start of the given period – Number of active customers at the end of the given period) / Number of active customers at the start of the given period

The calculation of the Churn rate is debated in the marketing world because there are a whole bunch of variants to calculate it, for example Hubspot proposes to remove from the calculation “all new customers acquired” in order not to distort the churn.

Of course, the attrition rate is not the only measure or KPI to follow in your strategy of retention and improvement of customer satisfaction. There is in particular the customer loyalty rate, acquisition rate, repurchase rate … We detail the 10 KPIs to follow to improve customer loyalty in a dedicated article .

How to predict a high or increasing customer attrition rate …


While there isn’t a magic crystal ball that can tell you if a customer is going to permanently unsubscribe , there are a few useful indicators you can look out for, including:

  • Low engagement and low usage : If you notice that a customer is signing in to their account less often than usual or, worse yet, not signing in at all, it’s a sure sign that ‘he might change his mind. For businesses that don’t monitor their account usage, decreased interactions (phone calls, emails, etc.) with a customer can also be a sign that they’re likely to unsubscribe.
  • Downgraded subscriptions : As with the low engagement rate, if a customer downgrades their current subscription to a lower tier , that’s a clear sign that they need your product or service less and therefore are more likely to unsubscribe.
  • Account Changes : Minor account changes, such as a change of address or billing information, are not of concern, but a change in the total number of end users should prompt further investigation. from you.
  • High volume of customer complaints : This is perhaps the most obvious sign of unsubscribing. If a customer has more than one complaint in their file, it can be assumed that they are at risk of unsubscribing. In general, a high volume of complaints is a clear indicator that something is wrong with your product, your support, or the overall customer experience and should prompt serious soul-searching.

And how can we avoid this increase in the attrition rate?

How to prevent attrition rate?

Make a great first impression

Tip # 1: It only takes 27 seconds for customers to get a feel for your business and its services, so it’s imperative that you get started on the right foot. The best way to make a great first impression is to immediately explain to prospects how your solution solves their problem. Each salesperson on your team must have this in mind, brief them in advance!

Exceed expectations with every interaction

Once you’ve made a good impression and closed the deal, be sure to keep promises made during the sales process in order to gain customer trust and sustain your business by making every interaction amazing .

Provide exceptional customer service and support.

Lack of good customer service is one of the biggest reasons customers unsubscribe. According to a study by Oracle , 89% of customers chose to do business with a competitor because of a poor customer service experience with the original brand. Customers want to feel like they are heard by your organization , so prove to them that they are.

You can provide exceptional service and support by being proactive. Don’t wait for a customer to complain before communicating half-heartedly with them. If you learn that an upgrade is now available for the product he purchased, or if you discover a problem with the product he purchased, make sure to contact him individually .

They ‘ll appreciate the time you took to offer them help , especially when they didn’t even know they needed it. If they feel like they matter to your business and that they’re not just a vehicle for making a sale, chances are they will stick around.

Learn more in our guide to customer satisfaction .

Offer value beyond the purchase.

Besides providing exceptional service and support, there are other ways to add value to your existing customers and keep them from changing their minds. It’s about making them feel that your business has more to offer than just a product that they needed to meet a single need. Show your customers that your business offers unmatched value .

For example, send daily or weekly newsletters, share relevant blog posts with them, or keep them informed of upcoming events (physical or webinars) and programs organized by your business.

By sharing blog posts related to an experience they told you or a product they purchased, they will feel flattered that you remembered them and thought of them. And this valuable content will further improve their lives and remind them why they chose your business in the first place.

Reward customer loyalty

There are many ways to reward customer loyalty , from offering a discount on a subscription to giving early access to new features, but implementing a loyalty program just might be the most effective.

Analyze customers who are leaving you

Measuring is good, but analyzing is even better . A great way to understand what causes some of your customers to unsubscribe is to ask them. Consider interviewing some of your customers who have changed their minds to find out why they left you for another brand. Analyzing the data can help you draw important conclusions about the changes your business needs to make to reduce its churn rate.

Once you’ve figured out what changes need to be made, actually work on implementing them. Whether it’s a lack of communication, slow customer support, a faulty product, or some other factor, it’s important to think about how your business can best use feedback. .

Personalize customer experiences

As we said above, customers want to feel special . Yes, realistically they know you have hundreds, thousands, even tens of thousands of other customers. But, in their hearts, a small part of them feel that they matter and that they are taken into account. That’s why customers love to be recognized by name at their favorite restaurants, bars and shops. Even if they don’t get special treatment, like free products, they feel like they are being seen.

Likewise, you want to create that experience for your customers through your brand. Every customer should feel that they are special to you, because they are! Without their trust in you, you wouldn’t be in business. Therefore, personalize every customer experience.

Mass emails are easy, but it’s easy to see that they’ve been sent en masse . If you can’t handwrite every email you send to your customers, try grouping customers based on certain demographics or the products they’ve purchased to further personalize their experience. This extra step in personalizing the customer experience can be a deciding factor in keeping them with your business. Plus, use automation software like Twilead to create highly personalized email sequences automatically.

Focus on your strongest customer relationships

Sometimes you can tell when a customer is about to change their mind . He stopped liking your social media posts, unsubscribed from your newsletter, and sent out a few angry emails. Panicked, you might decide to put all your resources in one basket in an attempt to save that customer relationship. What comes to mind is flooding that customer with incentives to stay .

However, you would make better use of your time by focusing on your loyal customers . What can sneakily lead to an increase in the attrition rate is that loyal customers feel like they no longer matter to new customers. Since they’ve been loyal to your brand and offering for some time, it’s easy for businesses to think: “I don’t need to make any effort to communicate with this person. I know he’s gonna stick around“. But, like in any relationship, if a person feels like they are being used or become an “old story,” they will end their relationship.

Don’t let your best customers leave you; never lose sight of the customers who have been there for you through it all. These are the ones you need to focus on; it is better for a recent new customer to unsubscribe than a long-standing customer.

Analyze and reduce your attrition rate via Twilead

If there is one thing to take away from this article, it is that the fight against customer disaffection almost always starts with improving the customer experience and then by analyzing the different KPIs around the rate of attrition.

Twilead allows you to create a tailor-made experience for all of your prospects and customers. How? ‘Or’ What? Via this tool you can create websites easily by working on the UI / UX design, write personalized emailing sequences and monitor all the data on a CRM to prevent and reduce its attrition rate as much as possible and increase loyalty his clients!

To book a product demonstration and benefit from a 14-day free trial on Twilead.

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