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3 Fool-Proof Ways To Reduce Customer Churn

July 14, 2021

A lot of time, energy, and capital is invested in capturing and closing hot leads (and thus acquiring a host of new customers), but what about ways you can keep the customers you already have? That’s the essence behind figuring out creative ways you can reduce customer churn and protect your bottom line.

As you may already know, it’s more cost effective to retain old customers than sign new ones: but to what extent? Well, according to Bain and Company, a 5% reduction in churn translates to an approximate increase in profits by 25% at the lower end, all the way up to 95% at the higher end. So it’s well worth investing in your existing customers, and taking a few small actions (which are especially low cost, considering the expense associated with business development and other cold outreach methods), which can have an outsized impact on your annualized revenue. 

So that being said: what are some fool-proof ways you can reduce customer churn, starting today? 

Let’s dive in. 

What Does It Mean To Reduce Customer Churn? 

Sometimes we throw around terms like customer churn and revenue churn (despite sounding similar, they’re quite different concepts), and we get lost in the associated numbers, without taking a moment to evaluate exactly what we mean when we use the term “customer churn.” 

Essentially, to calculate your customer churn, you will take the number of customers you lost in a quarter by the number of customers you started the quarter with. (There’s some debate over when to define a customer as ‘churned’, but more important is that you keep your definition consistent and stick to it, so you can compare apples to apples). Remember: it doesn’t have to be on a quarterly basis; you can also calculate it by year, but you need to keep the set periods of time for each number the same in order to control for seasonality and other external factors

Punch those numbers into a calculator and you have your customer churn percentage for that period of time. 

3 Ways To Reduce Customer Churn 

1. Figure Out Where Things Are Going Wrong 

It goes without saying that a certain level of churn is normal. It varies by industry (cable, general retail, and financial credits boast the highest churn rates of around 25%), and company age (companies older than 10 years seem to average between 2 and 4%, while younger companies hover between 4% and 24%). All things considered, churn rates of between 2-8% are about “average”, across the board. 

So once you’ve discovered your industry average, and weighed it against important factors like company age, you can see how well your company is doing comparatively to others in your industry. And even if your company does have a healthy rate? There’s no reason why you can’t improve on this number, and that’s where some deeper insights will come in handy. 

Start by evaluating your existing customer service and look for any chinks in the armor. First, examine any point in the customer journey where there’s a high number of touch points before working your way down to lower touch point interactions. Once you’ve collected this information, you can get a birds eye view of where the churn is happening. Is it occurring shortly after people get in touch with your customer service? Does it occur after trying to sign in to your website? Is it right after they receive your product on their doorstep? 

Here, take a look at the potential frustrations your customers could be facing, and see what patterns you notice as it relates to churn after key trigger events. 

2. Hear From Current Customers First-Hand 

You can do this by evaluating third-party forums and websites, such as or Here, you should be able to see customers’ complaints crystal clear, since they’re explaining in their own words what the main issue is. 

At this point, you need to look for common threads of dissatisfaction and brainstorm how you can begin remedying these grievances. Remember to prioritize the problems that seem to be the most critical, while balancing this against the ‘easy to resolve’ ones that take little effort and capital to fix. Chances are, what is a low-cost issue for your company will have an outsized impact on your customers’ happiness (and thereby your churn rates). 

Keep in mind that you can also contact customers directly through email, phone, and text, even offering incentives for their feedback (through prizes or discounts) to encourage higher participation levels.

This has two benefits: 

  1. Show that you care about your customers, thereby stoking customer loyalty
  2. Get deeper insights into customers’ positive and negative perceptions of your business and its service

3. Personalize Your Touch Points 

The best way to show customers that you value their business? Show them that you care about their time, contentment with your products/services, and their hard-earned capital. An excellent way to communicate this is to focus on providing value and personalizing every interaction, every step of the way. 

For instance, you can show your customers you value their time by choosing interactive technologies that increase ease of communication – such as AR-enabled technologies like remote first service

This capability is particularly useful for reducing customer churn because it merges customer and representative reality via a shared screen in which customers and your service representatives can work together to resolve issues that usually require lengthy discussions (or even an in-person service call).

The ability for customers to visually point out problems, use hand gestures to communicate their points, and representatives face to face are excellent means by which to:

  1. Eliminate miscommunications and frustrations
  2. Reach a resolution quicker and easier
  3. Personalize key touch points to show customers you truly care about their experience with your company

Contact us for a free, no obligation demo here, or learn more about some key benefits of remote first service that help reduce customer churn.

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