Churn

The percentage of customers who cancel a product or service or leave within a specified time period.

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The percentage of customers who cancel a product or service or leave within a specified time period.

In order to calculate churn rate, divide the number of customers that you lost last quarter by the number of customers that you started that quarter with.

Here are several suggestions to reduce churn:

  1. Find out from your customers why they left. The best way to do this is by actually calling your customer. Sure, this doesn’t sound like a good way to spend your day, but it’s the quickest way to find out why the churn is occurring. It’s said that 68% of customers leave because they don’t feel valued. Calling them is a way to let them know they are.
  2. Engage with your customers. This is referred to as relationship marketing. Keep your customers coming back by showing them the value of your product and letting them know they are valued.
  3. Identify the at-risk customers. Once you know who is likely to leave – and why – you can change business habits to keep them. Maybe customers have asked for a quote and you forgot to follow up. Some may leave because they find that you follow up too much. Tweak your strategies, and things will fall into place.
  4. Define your best customers. Know who values your product the most, and you will likely go the extra mile for them – probably effortlessly.
  5. Offer incentives. However, make sure that the incentives don’t cost your company more money than it takes to keep these customers.
  6. Pay attention to complaints. It’s true that most people don’t complain – they just leave. But for those who do have something to say, listen. They may be speaking for a larger group than you realize.
  7. Make sure your customers know what makes your company special, and why they should stay. Put your best salespeople on the case, and they can tell your at-risk customer why your company is unique.

Last updated: 2021/08/04