The customer churn!
How to stop it?

photo auteur emmanuel pasquet


Approx. reading : about 8 min

Winning new customers is only profitable when you retain the existing ones!

When customers aren’t happy, they stop doing business with you. It’s as simple as that. The more customers who leave, the less you grow. If you want to keep your customers, you need to tackle the churn rate.

Customer churn rate has a significant impact on your business as it reduces revenue and profit. Yet surprisingly, more than 2 in 3 companies do not have a strategy to avoid customer churn.

Here we are sharing a list of 12 practical strategies to help you focus on lowering the churn rate and building relationships with your existing customers for a very long time.

There is not a single business in the world that has never lost a customer.

And each business faces it differently; some immediately start looking for new customers to replace the loss when others are working hard to analyze what went wrong and how to quickly identify customers with the greatest risk of unsubscribing.

This problem is called the customer churn rate or customer churn.

What is the customer churn rate and what it shows?

The customer churn rate is calculated by the number of customers who leave your business during a given period. In a more down-to-earth sense, churn shows how successful your business is in keeping customers by your side.

But why is the churn rate so important to businesses in the first place?

Well, the short answer is – because it costs too much for businesses to lose and then win back customers who have decided to stop doing business with them.

First, it is the financial impact of unsubscribing that has the most negative impact on the income statement.

“Businesses are losing the equivalent of $ 1.6 billion in revenue per year due to customer churn! And according to Forrester research, it costs 5 TIMES MORE to acquire new customers than to keep an existing one.

Not yet convinced?

Also according to Forrester, it will cost you 16 times as much to bring a new customer to the same level as an existing one.

The second reason is that the more customers a business retains, the more income it generates in the long run!

For example, a Harvard Business Review report published in November 2018 on the topic of customer loyalty states that on average, a 5% increase in customer retention rates translates into an increase in profits from 25 to 95. %.

And if there is a little more to say, this report shows that 65% of a business’s revenue growth comes from their existing customer base on average!

The same truths are being revealed by KPMG, which has found that customer loyalty is the primary driver of a business’s revenue. 

An 18-month study carried out in retail between 2017 and 2018 showed that customer retention was the main source of revenue growth in this very difficult market and with very contrasting customer loyalty.

It seems obvious that this is not specific to retail and that customer retention (and therefore the fight against customer churn) is an essential element of the economic performance of companies.

But that’s not all.

According to several Gartner articles from 2018 and 2019, it is essential to put in place measures that fight against customer churn because in the majority of business cases, 80% of a company’s future revenues will come from only 20% of its existing customers.

Moreover, it is difficult to convince, conquer and sell to new prospects! All sales managers know this well! It’s much easier to sell more to existing customers. Gartner’s analysis shows that the probability of selling to an existing customer is 60 to 70% and only 5 to 20% to sell to a new prospect.

It is therefore quite logical and essential to focus on reducing the churn rate, because keeping your customers pays off!

Yet few companies understand this and, as a result, still struggle to implement a successful churn prevention strategy.

So how do you reduce customer churn?

12 ways to reduce your customer churn!

Don’t panic, there are things you can do here and now to combat client churn.

To get started, here are 12 ways to reduce customer churn.

1. Analyze why churn occurs

Yes, it might sound obvious, but let’s stress again: you just need to find out why the customers have decided to leave.

The easiest way to do this is to talk to the customer.

And by “talking” I mean really talking: getting your customers to the phone, for example. This way, you can show that you really care about them, and you can instantly find out what went wrong.

68% of customers leave because they think that a business doesn't care!

Forrester research – Why your customers leave !

Don’t save the relationship by focusing primarily on impersonal online surveys; contact them in a personalized way and ask them why they left. This will give you immediate feedback and valuable feedback on your products and services on whether or not your product solves their problems or causes them problems.

In fact, communicating with customers works wonders in churn analysis. And you have to actively use all channels for this: phone, email, website, live chat, and social media.

2. Interact with your customers on a regular basis!

Another way to avoid unsubscribing is to actively engage your customers with your product.
Often referred to as relationship marketing, give your customers reasons to come back by showing them the daily value of using your products, integrating your products, services, offers, and more to their daily workflow.

So how can you do it?

To begin with, make sure that you are bringing real and above all regular (if not permanent) profit to your customers. Provide regular updates, such as limited time offers, specials, or upgrades by communicating about new benefits.

Again, you need to engage with your customers across all channels.

According to a recent report from Marketo, the most effective customer engagement channels for B2B companies to reach their existing customers are email marketing.

Dotsha includes the following features

Automated email notifications

Customers self-care portal

API for communication

3. Educate the customer about your business and your products, explain to them what makes you different!

This churn prevention tip naturally follows from the previous point.

You should do everything to optimize the rate of use of your products and services by providing content on usage, such as best practices, and ensuring high quality user support / assistance.

This will help you increase retention and reduce the churn rate. Offer free training, webinars, video tutorials, and product demonstrations – whatever it takes to make your customers feel comfortable and informed.

In other words, you must not only give them the tools that work, but also train them on how to use those tools to the maximum benefit. 

In this way, you will demonstrate the full potential of your products and services, and ensure that customers have a successful integration and implementation.

4. Use your data to find out who is at risk

The best way to avoid churn is to prevent it from happening in the first place, right?

There is always a group of customers who are more likely to leave than others. So it’s in your best interest to know who it is. That way, you can contact them in time to keep them.

Identifying at-risk customers is one of the most popular unsubscribe tactics for businesses, especially B2B. The good news? It is possible to identify the group of clients “at risk”.

For example, identify which customers have not been contacted for some time; or maybe those who requested something like a price list, quote, or just more info, and weren’t relaunched as a result?

Knowing all of this will help you become more proactive in preventing churn.

In addition, after analyzing the reasons for the churn, you become aware of certain actions, or perhaps the lack of actions, that your “churned” customers (those who have quit) have taken. This knowledge can help you predict whether someone who behaves in the same way is likely to leave your business in the near future.

5. Define your most valuable customers

As devious as it sounds, you had better separate the most valuable / profitable clients from the rest and go the extra mile to make sure those valuable clients get what they signed up for.

Why? These are the customers you want to keep the most. Valuable customers should be taken care of as they generate the biggest income.

A history of your interaction with customers can show how involved they are at each stage, if they have had any issues with the product, and if those issues have been resolved.

So what you can do is segment your customers into groups of profitability, willingness to leave, and likelihood of responding positively to your offer to stay.

This way, you can better predict customer churn rate.

6. Offer bonus, discounts, business incentives

Another tip is to offer incentives to stay or even use your products / services more. For example through discounts and special offers etc … that you reserve for customers who have been identified as likely to default.

Confused about how effective this tactic is? Here is a comparison of the best tactics to fight against churn; business benefits and incentives come first.

Dotsha will strengthen your business response to the market

Manage trial periods

Apply coupons and discounts

Manage break in billing

But be aware that you must have properly assessed whether offering an incentive is right for you. This means you need to make sure that the costs of your loyalty program don’t outweigh the customer benefits you intend to save.

At the end of the day, you shouldn’t be wasting money on clients who aren’t likely to earn you substantial income in return.

7. Target the right audience, the right customers

No matter how sophisticated your retention tips are, they can all get lost if you don’t attract the right audience.

What I’m saying here is that if your first customer interaction is “free” and “cheap,” you risk attracting people who aren’t looking for the value you offer. These “free” collectors are the most likely to leave.

It is best to target those who appreciate the long-term value of products and see quality investing as a benefit. You better focus on those.

8. Offer better service, focus on the customer experience with your products and solutions

You anticipated this advice earlier, right?

Yes, this is the most obvious way to keep customers by your side. In fact, poor customer service is the number one case of customer churn. The top two reasons customers leave the company are incompetent and rude staff and unbearably slow service, according to a report on Oracle’s Customer Experience Impact.

The churn rate due to poor service is 70%, according to FORRESTER research.

Don’t underestimate the negative effects of poor customer service!

Studies show that 58% will never use a business again after 1 negative experience, and 48% who have had one will tell more than 10 people.

And we’re not talking about terrible service here. Sometimes an average customer experience, or what you might call a “BOF” experience, is an unsubscribe trigger. You just haven’t shown anything to hook this customer.

So make sure you provide the best in class customer service that makes customers happy above all else.

9. Offer long-term benefits in return for multi-year commitment contracts

How about using your pricing to get stronger engagement from your customers?

Instead of non-flexible contracts, try offering a more flexible subscription model. This way, your customers will have enough time to implement the product and see the benefits of using it.

And once they see the benefits, they are more likely to engage more or even promote your service offerings in their ecosystem or those around them.

Dotsha will strengthen your business response to the market

Configure flexible pricing 

Allow options and upselling

Optimise billing experience

10. Pay attention to complaints

Complaints are like the tips of an iceberg – they suggest that most of the problem is hidden in plain sight.

Did you know that 96% of unhappy customers don’t complain and 91% of them will just leave and never come back?

Did you also know that it only takes one negative experience to make 32% of customers stop doing business with a brand they once loved?

So you had better take complaints seriously and act accordingly, and thus avoid customer churn, because as Strauss & Seidel claims, dissatisfied customers whose complaints are dealt with are more likely to stay. loyal and even become lawyers for other average clients.

11. Make your best people handle cancellations

Saving a client on the verge of churn is certainly not an impossible task.

But you will have to bring in your best trading experts to get good results by keeping them.

Find out who your best, most convincing sales reps are and give them the task of speaking to those who have decided to leave, and in this way, avoid the churn of customers. 

At this point, you can certainly use their charisma and experience to deal with difficult situations and unhappy customers.

Sometimes all it takes is a good listener who is willing to step into the customers’ shoes to make a difference. 

According to the Customer Service Group customer satisfaction survey, the majority of respondents said it was more important to be heard and respected than to solve their problem.

12. Show your competitive advantages

How different are you from your competition? What sets you apart? What will your customers lose if they decide to leave?

Answering these questions will help you define your competitive advantages and show them more. Competitive advantages are like the honey that sticks your customers to you. Analyze what you do best or what makes you unique. Now think – do your customers know that?

If not, it might be high time you told them.

What conclusion?

Now that we’ve established that you just can’t afford to lose customers, you better focus on being a business that can keep customers. This means that your customers should clearly understand why it is better to stay with you instead of leaving.

And you would do well to be proactive in how you avoid churning out customers by creating the conditions under which they would clearly see and use the benefits your products offer.

Just keep in mind that 82% of companies say retention is cheaper than acquisition and that even a small 2% increase in retention can reduce costs by up to 10% (source Gartner research 2018).

It’s also important to realize that the main reasons for the churn rate have nothing to do with the product, but mostly boil down to poor customer service!

Overall, building customer loyalty isn’t magic.

It all comes down to analyzing the reasons for the churn rate and then acting on it. Communicate with customers and involve them in your products, improve your customer service levels and make sure they see what they earn if they stay with you, rather than walk away from you.

To learn more about Dotsha and understand how we can help you reduce CHURN, please contact our sales team for a product demo.

photo auteur emmanuel pasquet


Approx. reading : about 8 min

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