customer churn

4 things you didn’t realise prevent you from reducing customer churn

Customer churn, or customer attrition, is how many customers you lose in an observed period. For a business to grow, the amount of new customers taken on has to exceed the number lost.

Your churn rate is integral to measure company growth, and should ideally decrease over time. Even an unchanged rate implies your business is getting worse at retaining your customers as less new customers will be trying your products, but more existing customers are leaving to maintain a steady churn rate.

Getting on top of your growth rate means understanding not just how to attract new customers but figuring out why customers are leaving. There are a few insidious things you might not realise your business is doing which will be bumping up your churn rate; a couple of which could easily pass as good performance in the short-term.

Taking anyone’s money as long as they’re giving it away

A scattergun approach to attracting new customers might seem like a great idea; if you can expose lots of potential customers to your products, you stand a greater chance of one of them taking up your business.

The downside is your product is likely to end up being used by customers who don’t need the product for what it was designed to do. If your product is a bad fit for the customer’s needs, it’s inevitable the customer will leave. Not only will they leave, affecting your churn, they’ll leave in a destructive and drawn-out manner.

Bad customers soak up your support staff’s resources, try to shoe-horn unnecessary features into your services and poison your analytics with pointless data. They might even bad-mouth your company in public about the bad experience and hurt your ability to attract new customers.


Pushing low prices

There’s nothing novel about discussing a discount when organising a sale, but many businesses run the danger of failing to put the quality of their products first and pushing their low prices.

No reputable business wants customers to sign up for a product with a bargain-bin mentality because sales staff have pushed deep discounts instead of quality. If your product brings genuine value to your clients, this value should be the central component of your approach to prospects even if offering steep discounts gets clients signed up.

While customers might be coming in, if they’re attracted by low prices instead of the quality of your work, they’re less likely to stick around as customers.


Overpromising capability

An ever-present source of chuntering and discontent for tech companies are promises made by eager sales teams with looming targets. This includes selling future improvement and features as if they’re already functional or just around the corner.

Misrepresenting the existing capabilities of the product, or bending the truth about when features and improvements will be implemented, becomes a problem for companies when they sign up on the promise of these functions.

When the reporting modules, mobile capacity or analytics features don’t turn up on time, customers won’t have a huge amount of patience before they terminate their service.

Not selling to good customers on the way out

As we said earlier, hanging on desperately to every possible customer isn’t advisable, but it’s vital to communicate with good customers. Getting your sales staff to get back in touch with customers which are leaving, or are signalling they’ll leave, is important for two reasons.

Firstly, they’re in prime position to compel your existing customers to stay with the company instead of leaving. You’ve employed them to sell your products, it’s what they’re good at, employ their skills on existing business too.

Secondly, your business needs to have conversations with good customers if they leave. When a customer’s needs line up with the capabilities of your product, your customer support teams aren’t signalling any distress from the client and they’re not vocal about their unhappiness, it’s time to determine why they’re quitting if you want to reduce churn in the future. 

Digital Rewards in an instant

There’s a massive amount more to say about retaining and attracting customers, as well as churn rate, but these four areas can be spotted and addressed from a few conversations with your managers and hatch a plan to make improvements.


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