Business Essentials: Why Customers Churn?

April 15, 2022

It is time to face the facts: even if you work hard to attract ideal customers, others will always leave. Why do the customers leave? This article explains why customers churn and what you can do to retain them.

Churn rate is the rate at which customers stop buying from your service or unsubscribe is what’s known as churn. High churn rates can cause serious problems for your business, slowing growth and decreasing revenue. This is why you need to understand why customers churn and what you can do to retain them.

Traditional marketers believe that you must acquire customers at a faster rate than you lose them to counter this.

Retention Science believes that this methodology is similar to trying to fix a leaky pot by pouring more. It puts pressure on the company’s ability to acquire more customers. Then, it’s easy to forget about the shoppers you already have.

Focusing on acquisition alone can lead to neglecting existing customers, which can eventually lead to them leaving. This vicious cycle is one that many merchants don’t realize they’re in. It’s a vicious cycle that is hard to break. Not only is it counterintuitive but also extremely expensive.

According to the White House Office of Consumer Affairs (WHOCA), existing customers are worth seven times more than newly acquired customers. you can use more precise and predictive retention marketing strategies by analyzing your customer’s behavioral, demographic, and social data.

Before you can focus on how to keep them coming back, it is important to understand why they leave.

Here are some of the reasons why customers churn and how to stop it:

why customers churn


Bad customer service

Spoiler alert: Customers don’t leave because they find a better deal. According to the U.S. Small Business Administration (US Chamber of Commerce), 68% of customers quit because they are unhappy with the treatment they received. Click To Tweet

Customers who leave often don’t go away quietly. The average customer will tell 9-15 people about their user experience. This is a clear indicator that poor customer service can and will actively harm your business.

Good customer service is about making customers feel important. This can be achieved through polite, friendly communication and prompt handling complaints.

Shoppers don’t want feel like they are just numbers in the system, or line items in a revenue column. They want to feel valued and engaged.

Personalization is key to achieving this goal early. Personalization gives the impression that your company is listening to your customers.

Shoppers who feel that the company is interested in their needs will often return the favor. First, show your customers that you are interested in them.

Too little value

Customer churn is also a top reason for value. It’s important to not confuse “value” and “price.” Value is an all-encompassing term that encompasses the entire customer experience.

This is evident in the fact that 55% of customers will pay more to get better service than simply choosing the lowest price. Personalizing incentives can help you provide value to your customers. What is important to one customer might not be valuable to another.

Understanding what customers value is key to being able to determine what they are looking for. For some shoppers, free shipping is more than a coupon with a percentage discount. It is important to tailor your approach to each customer in order to provide him or her with the best value.

Communication of poor quality

Customer churn can also be caused by inept and unengaging communication strategies that turn off customers. Email subscription rates are one example. 35% of customers opt out of receiving emails too often.

Your company will be perceived as annoying if you send out too many emails in a batch.

Avoid spamming your customers to avoid this. You need to know what customers value in marketing. Make sure that each message serves a specific purpose.

These purposes could be anything from a welcome message to inform the customer about your brand to an incentive email to encourage them to return. Remember to emphasize personalized, quality communication over quantity.

Poor Product-Market Fit

We have all been sold products that we don’t need or want. It doesn’t feel good to be the one being sold to. Yet, companies continue to do this to others all the while, which can cause customer attrition.

Companies can either pretend it never happened, or justify it by saying “it’s revenue we wouldn’t have earned otherwise.”

It is important that your sales and marketing teams attract prospects and close opportunities that can benefit from the product. your company’s reputation will be damaged if you close customers who won’t succeed on your platform, often using high-pressure sales tactics.

It takes money and time to support and close a client who is not a good fit. It is better to spend your time and money on clients you can help.

This problem can be fixed if there is consistent communication between the customer success, sales and marketing teams. If customers are being sold the wrong product offering, it is important that each team’s leadership diagnoses the problem. If these conversations are not handled with tact, they can become heated.

Be sure to be objective and get to the root cause of the problem and not attack other members of your team.

Sometimes, this means that your company will have to change its standards for qualifying leads. This will ensure that they have the right needs and that your company can solve them. You might find that a few tweaks to your product.or onboarding can make this segment of customers more successful.

It doesn’t matter what, it is important to agree not to sell to customers you aren’t able to make successful.


Before buying any product, a customer must consider the pricing aspect. customers who are more concerned about price would place it higher on their priority list than products that fit the bill. This becomes even more problematic if they don’t find value in your product.within the first few weeks.

Price-related churn can be reduced by making sure your customers find value in your product.quickly so they feel it’s worth the price. To ensure that you are targeting the right customers. Click To Tweet

Problems with products

Your products are relied upon by customers to solve their business problems and run their businesses smoothly. If your product is down or has bugs, it can cause revenue loss and even lead to customers being turned away.

You can reduce churn rates or avoid them by keeping customers informed about the progress of the product investigation, fix, or regular software updates. This is also how you can win back customers’ trust.

Scalability issues

Clients might have specific requirements that are difficult to fulfill. Clients might require new functionality or integration in a product, or service, that you don’t offer.

This can be avoided by planning your product.development strategies well in advance. Gather feedback from customers and group it by parameters like client size or annual income. This data can be used in the future to set priorities for new product features.

Customers don’t get the results they want

Your product.is not attractive or more feature-rich than the competition, but because it fulfills the customer’s desired outcome. your product.is a tool that helps you achieve your goal. If your product. fail in achieving the desired result, customers will likely abandon you and search for better options.

Customers quickly lose interest in products that don’t work well. Customers need to be able to reach their goals with your product. Your onboarding process, customer support teams, and self service education all play a significant part in reducing customer turnover.

Competitor-driven Churn

Even if you are able to help customers achieve their desired outcomes they will still churn if they feel a competitor will do better.

Customers are more likely to achieve their first success milestone if you help them quickly. This can be countered by specialization. If you are able to distinguish yourself from other SaaS solutions (in the form of your unique expertise or product features, or customer service), it will be difficult to compare you to a competitor.

When customers leave, you will be losing market share, reducing your employee enthusiasm, and giving your competitors a potential weapon.

You closed the wrong deal

Sometimes customers aren’t sure what your product.can do. This is the ultimate example of desired outcome churn. Your SaaS product won’t help your customer achieve their goals because it’s not the right product for the job. Click To Tweet

This is usually caused by people not liking your SaaS product.

To avoid this type of churn, it is important to get to know your ideal buyer persona as well as their needs. you can make your website the ultimate self-selection tool by using interviews and surveys to understand their needs.

Natural Cause Churn

Natural Cause churn is a by-product of the unavoidable problems that sometimes crop up with the software-as-a-service business model. These problems are not always avoidable, but you can take steps to minimize the damage they cause to your customers.

Cashflow Crisis

You will encounter customers who are having cashflow problems if you sell to businesses. Your contract could be on the block, regardless of whether it’s a short-term or long-term problem.

This can be avoided by moving your SaaS business higher up their priority list and making sure that you are considered an essential service instead of an additional cost. you can do everything we have said about creating immediate value, but you also have the option to increase your contract length (it is easier to terminate a rolling 1-month contract than a 6- or 12-month commitment), and switch to an automated recurring payments solution.

Your market is seasonal

The seasonal market can have a significant impact on your customer churn rates. A Halloween store will likely see a large influx of customers in the months leading up to Halloween, and a high customer churn rates thereafter.

This might be the case. It might be more sensible to evaluate your churn rate over a longer time frame, such as yearly rather than monthly.

The best way to counter churn is to expand your product.service offering or add to it to make it more relevant outside of season.

Your renewal offers don’t sound appealing

Giving customers the right offer at just the right moment can play a major role in reducing customer attrition. your customers may decide that your renewal offers don’t appeal enough to them when they have other options.


For your business to grow you need to understand why customers churn and find means to stop it. customers who leave your business because of poor customer service, product issues, technical glitches in payments mode, language barriers, or poor customer support can be discouraged.

To reduce customer churn, we must pay attention to the needs, wants, and personal motives of customers and work hard towards them. We must be proactive and keep in touch with our customers to ensure that they are satisfied with the products and services we offer.

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