How to Reduce Customer Churn: Best Tips to Get Started


Retaining old customers can be quite a challenge as opposed to acquiring new ones. But if you manage to reduce the customer churn rate then you can go on to build a thriving business. Your customer churn rate is a crucial metric that determines the success of your business. In fact, 1 in every 26 customers will complain and the rest will simply churn i.e. leave your business. Although there will always be a few customers who will churn despite the efforts you put in to retain them. But you know it’s a red flag when the number goes up. We’ll explore the best ways in which you can reduce the customer churn rate. But before that let’s understand what churn rate is after all?


What is Customer Churn Rate?


Customer churn rate is the percentage of subscribers of a service who discontinue their subscriptions to that particular service within a given period. Simply put, the customer churn rate depicts your loss of customers.


Why does customer churn happen?

Source: Visual Capitalist

This is how you can calculate the customer churn rate. 

Churn Rate = Number of customers who unsubscribed/Total number of customers Click To Tweet


Why is it Important to Reduce Customer Churn Rate?


If at any given point, your customer churn rate is more than your customer acquisition rate then it can take your business downhill. If you lose out on customers consistently then it will affect your profit. This is exactly why businesses are keen about reducing the customer churn and improving retention rate. So how do you reduce customer churn rate so that your business capital is not affected? Let’s find out.


How to Reduce the Churn Rate Significantly?


Find out the root cause behind your customer churn

Before you try and fix the problems due to which customers are leaving your business, it’s important to identify them. Here is how you can find the reason behind high customer churn.

  • Send them a customer exit survey
  • Call the customer and understand their reason
  • Check with them via a personalised email

It is best to speak to your customers over a call, if possible. It is a great way of letting them know that you care. Call them and try to understand why they are choosing to leave. You will most likely find out the reason for their decision. If not then you will at least get a hint as to why they might have left. You can also send them online surveys but make sure there aren’t too many questions which they have to answer. It could be a survey on your website or application or an email. Lastly, you can also use personalised emails to find out the reason for churn. All these methods will give you a lot of insight into why the customer has left you.


Your best customers to the rescue


Your best customers to the rescue 

Traditionally, businesses would identify the customers who are most likely to leave the business and then focus on retaining them all. While this might sound like a good plan, it can use up a lot of your budget. For instance, no matter how much you persuade certain customers, you cannot make them stay if they have made their mind. So then how do you stop the customer from leaving? Identify the customers who are most likely to stay after your re-engagement initiative.

Narrow down on the customers who are most likely to choose your brand after you reach out to them. Otherwise, you would end up spending a lot of money on customers who would leave you anyway. Your re-engagement activity for reducing customer churn can be a phone call, a promotional package, or even an email. Click To Tweet


Categorise your customers


Categorise your customers

The customers who loyally use your service for month after month are different than those who didn’t convert even after their free trial. Therefore, categorising your customers the right way is important for conversion and retention. So let’s say amidst your customers, there is a certain group that takes longer than usual to complete the tasks. You can send them a personalised email like this:

Hey Sharon,

I got an alert that you might have been having some trouble integrating Hybrid.Chat with your website.

If so, I’d love to help. Just reply to this email and I’ll connect with you. 



Try this with your customers to bring down the churn rate. Likewise, you can identify the other customer segments and then reach out to them so that they get the right assistance when needed. This will prevent them from unsubscribing to your business.


Offer Incentives 


Offer Incentives to reduce customer churn rate

When you see a hike in the churning rate, it is often a good idea to provide incentives to your customers. A small nudge like a promo code, loyalty program, and a discount can go a long way in making the customers stay. Moreover, it also makes them feel valued and appreciated. 

So when do you offer incentives to the customers? When their end of the contract is nearing and you think they might not renew. At this point, you can provide them a lesser than usual renewal rate to make them stay back. 

Moreover, you also need to find out what the customers require and whether your brand is meeting those requirements. Let’s say that your business lacks what they are looking for. Then you can always incentivise them to stay with you until you bring about a new feature or method that will meet their needs. This churn offer will help you save accounts that are planning to cancel.


Analyse churn when it happens 

Why wait until a customer leaves to do something about it? You can take proactive measures and use the data you already have to build effective and preventive strategies. You can predict customer behaviour by gauging the key signs of customer happiness and unhappiness. Doing so will help you rescue the relationship before the customers churn.

Find out when the customers churn out frequently. Is it after their free trial, after 60 days or after 90 days? Then identify whether the customers are leaving because of any specific reason? You will find a lot of insights into the feedback which they share with you which can help you provide them tailored churn offers to make them stay.

For instance, let’s say that a client at your gym hasn’t been visiting for three months now. This is usually when you know that they have decided to part ways with you for good. But you can turn things around by giving them a chance to attend free fitness workout sessions for three days with a trainer. This can ignite their interest back again and they will consider renewing the subscription.


Improve your onboarding process 

People sign up for free SaaS applications all the time but only a handful use it again. This is partly because, in the early stages, they don’t realise how they can benefit from the product. To make an impact and get them interested, you need to communicate clearly with your users. Precise words about how the product can help the user will give them a foresight for when the free trial is over. You can mention the features and benefits of your product via an email once they sign up. Close to the renewal period, you can let them know how switching to a paid version will add value to them. When customers know exactly what is ahead of them, they will find it easy to continue with your product. Click To Tweet


Incorporate chatbots for better customer service



Incorporate chatbots for better customer service

If you assist customers every time they need your help, they are less likely to abandon your brand. But how can you be available for all the time with the limited support staff onboard? With the help of conversational marketing! Deploy a chatbot on your website that is always available to answer your customer’s questions. It is fed with the right data and will provide valuable information 24/7 thus making sure that you never lose an opportunity to serve your customers. Moreover, it is incredibly easy to build and you simply have to edit a spreadsheet to get started! 


Final Take

The aforementioned tips can help you reduce customer churn significantly. While customer churn is inevitable, too much of it can hamper your business. With the right and proactive steps, you can reduce customer churn and improve the retention rates. Strategies like improving the onboarding process and analysing the churn can help a lot.

Would you like to bring the churn rate down with proactive customer interaction? Switch to HybridChat and let the bot do the work for you!


Stop Losing Customers!

Deploy chatbots with human take-over and focus on leads and conversations that matter. 


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