What is customer churn and how to avoid it? 11

Customer churn is one of the hardest pills to swallow for a business and yet, one of the important metrics to measure the company’s growth as well. To evaluate the success of your company, it’s crucial to measure the failures. Although it’s not the happiest measure, it does give you the hard truth about customer retention. It’s quite unrealistic to expect 100% of your customers to stay loyal to your brand. That’s where the customer churn comes in. 

What is the customer churn rate?

Customer churn rate is the percentage of customers who are no longer using your company’s products or services. You can measure customer churn by dividing the number of customers you lost during a period by the number of customers you had at the beginning of the period. It is obvious for a company to expect a churn rate as close to 0% as possible. To achieve this, companies have to measure churn rates regularly to identify their failures and take every possible step to reduce them.

Why is measuring customer churn rate important?

What is customer churn and how to avoid it? 12

Although no one likes to see their failures, it’s still one of the most important aspects of the business that helps leaders or professionals to make necessary changes in their business practices and take actionable steps to overcome these failures. For example, your company experienced a churn rate of 5%. That doesn’t sound too bad, right? Well, it’s important to measure churn rate as acquiring new customers will cost you more than retaining the existing ones. An increase in customer retention will be more profitable to you as the returning customers are likely to spend 67% more on your company’s products or services. 

Moreover, you can reduce your operating cost of acquiring new customers. You don’t need to spend your time and money on the existing customers as they have already chosen your brand. 

How to reduce customer churn?

What is customer churn and how to avoid it? 13Focus on loyal customers, but don’t neglect the others: While it could be more beneficial to invest in your loyal and profitable customers, do not completely neglect your other customers who are considering churning. Follow up and make them feel heard and valued. They might consider sticking around. 

What is customer churn and how to avoid it? 15

Analyse the churn: Whenever a churn occurs, use that customer to analyse why they left. Analyse how and when the customer churn occurs in your company and accordingly take actionable measures. 


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Make your customers feel cared about: Do not wait for the customer to encounter a problem and reach out to you. Instead, you contact the customer and make sure they are having a good experience with your brand. This way, they will be more likely to stick around. 

Wrapping Up

Customer churn rate isn’t the happiest metric for customer experience measurement but it does play an important role in a company’s growth. While measuring customer churn gives you a hard truth, it also helps you work on your weak points and come back with a more effective strategy to enhance the customer experience.