How to Manage Customer Churn with a CS Platform

If you’re looking to decrease customer churn, a customer success platform can be a helpful tool. Here’s how to manage customer churn with a customer success platform.

I used to work at a company where we had high rates of customer churn. It was frustrating because we would put so much effort into acquiring new customers, only to have them leave shortly after signing up. We knew that we needed to do something to decrease our churn rate, but we didn’t know where to start.

How to manage customer churn? The solution is a Customer Success platform. This allowed us to track our customers’ engagement and provided valuable insights into why they were leaving. Armed with this information, we were able to make changes that decreased our overall churn rate by a whopping 30%!

How to Manage Customer Churn

There are a few ways to manage customer churn. The first is to identify the warning signs that a customer is about to leave, such as decreased usage, late payments, or negative feedback.

If a customer exhibits any of these signs, try to reach out to them. If the problem is serious, offer an incentive such as a discount on future purchases.

You can also track which customers are leaving and why, so you can identify patterns or problems and fix them.

What is Customer Churn?

When customers stop buying from you, it’s called customer churn.

Churn is the number of customers who stop doing business with you during a defined period.

Customer retention is a big problem for businesses across all industries and the average rate of customer retention can be shockingly low. This means that many businesses struggle to keep their customers from leaving.

In 2020, 25% of customers left their retailer. 21% of consumers also unsubscribed from their online providers. These rates are very similar across all industries and show that all businesses are having a hard time keeping their customers.

Not only are new client acquisition costs high, but keeping current customers is less expensive than acquiring new customers.

How do you figure out when customers are about to leave? And what do you do about it?

Luckily, there are plenty of ways to re-engage inactive users.

Today, we’ll talk about how you can predict when your customers will leave you, how you can prevent it, and what you can do about it.

Understanding Customer Churn Rate

Here’s an example of what customer churn rate looks like:

Over a month, business Y lost 200 of its 4,000 customers to competitors.

To calculate the churn rate, take the number of customers who left and divide it by those who stayed. Then, multiply that by 100 to get the percentage.

Using the formula, business Y had a churn rate of 5%.

Churn rate is an important metric for businesses to track progress over time. By understanding and calculating churn rates, businesses can more effectively target areas of improvement. Additionally, expressing churn rate in dollar value can provide valuable insights.

It’s important to be clear when a customer has churned. This is because some sales are much longer than others. By knowing this, you can ensure that you’re on the right track and that your company is moving forward.

In industries where customers purchase infrequently, such as in optics or furniture, it’s common for a customer to purchase after a long period of inactivity. This doesn’t mean that they’re disengaged or likely to churn.

It’s important to define what “churning” means for each of your products or services. This way, you can make sure you only contact customers who are in danger of leaving you.

Why Does Customer Churn Matter?

Customer retention is important, but there will always be some customers that leave. It’s unrealistic to expect that every customer you sold to on day one will be with you years later.

But, if your customers keep churning, or if your rate of customer loss is increasing, then it’s time to do something about it.

Customer retention is incredibly important, as losing customers means losing money.

Dissatisfied Customers Can Hurt Your Brand

A churned customer is no longer using your product or service. These customers are unhappy, and they may be damaging your reputation. That’s why it’s important to try to reconnect with these customers and win back their business.

Don’t risk losing customers, and damaging your brand name, by letting customer churn happen. Reach out to those at risk of leaving, and try to repair those relationships before it is too late.

Customer Churn Costs More

It can often be argued that retaining existing customers is more cost-effective than finding new ones.

Customer Lifetime Value (CLV) is the total value of a customer to your business. Some argue that CLV is more important than just measuring the cost of acquiring or retaining customers.

But no matter which way you look at it, it is generally better to try to keep existing relationships than to write them off and start from scratch.

Losing customers affects your bottom line, so it’s important to address your rate of customer turnover.

Customer Churn Can Impact Future Growth

If your customer turnover rate is high, then it might be an indicator that you don’t have the customer numbers to support the offering of new products. If, however, you have an existing base of customers, then they are the most likely group to be interested in your new products or services.

High customer turnover can seriously impact your growth and business. To combat this, you should take measures to reduce it.

The 2021 customer experience study reveals how much companies will be investing in CX in 2021.

How Do We Categorize Customer Churn?

By proactively analyzing customer behavior, you can identify potential reasons for churning and take steps to lower their occurrence.

While you can’t avoid all instances of customers churning, you can classify them.

1. Unavoidable Churn

Customers that are lost because of unavoidable circumstances are very difficult to bring back.

Instead of trying to save them, you should analyze the reason why they left.

There are several reasons that a customer may involuntarily churn. Some of these reasons include closing down their business, cash flow shortage, or outdated equipment. Another reason could be a change in management within the company that is using your service.

2. Avoidable Churn

This happens when a customer decides to stop buying from your company out of their own free will. This usually happens when the customer is not happy with the product.

It’s usually more cost-effective for companies to spend most of their marketing efforts on retaining existing customers rather than acquiring new ones.

Some of the common reasons why a customer might choose to leave your business are bad customer service, lack of communication, pricing issues, too many support issues, difficulty using your product, bad onboarding, and not having a plan that meets their needs.

To reduce your customer churn rate, you must address these concerns directly.

As a business owner, it is crucial to be aware of the percentage of churn that occurs for avoidable reasons. This way, you can plan more effective retention strategies. Keep in mind that even a small decrease in the churn rate can have a significant impact on your bottom line.

“Work as hard to keep a customer as you do to find a new one.” — Bill Quiseng

Causes of High Customer Churn Rate

There are a variety of reasons why your customer retention is low, and you’ll need to measure and analyze your churn to determine why.

Here are a few common causes of high customer churn rates.

1. Poor Customer Service

If you’re noticing that your customers are churning, it may be time to reevaluate your front-line customer support team. Your current customers should be getting the same high level of service as new ones, so make sure that your team is providing that.

2. Bad Product to Market Fit

If a large percentage of your customers are leaving, it could be a sign that the product you’re selling isn’t quite what they were looking for. It could also be that you aren’t targeting the right audience.

Making sure that your product is aimed toward the correct target audience and is developed properly can go a long way. Also, be sure to include features that your customer base has grown to expect.

3. Poor Target Audience Research

Even though you may have had your existing customers for a while, it doesn’t mean you know everything about them.

Your customers may be interested in features that you don’t currently offer. This could be a sign that there’s a new market that you haven’t tapped into yet.

The only true way to understand what your customers want is by engaging with them.

4. Wrong Pricing

Your customer’s willingness to pay might have changed since they first signed up.

If your prices are too high, you could lose customers to competitors. Make sure you keep an eye on the market and adjust your prices accordingly.

5. The Competition is Better

If your competition is beating you, it might be because they’re more in tune with what your customers are looking for.

If you want to keep customers, you should evaluate your current business in comparison to your competitors. This means looking at your customer journey and experience every step of the way, not just at the beginning. Offering features your competition doesn’t and that your target customer wants is key to keeping them.

It’s crucial that you constantly iterate your product, as you start adding features your customers want, and that your competitors lack.

6. Your Market is Seasonal

A seasonal business, such as a Halloween costume shop, can see huge fluctuations in its customer turnover rate.

If you’ve noticed your retention rates dropping, it might be a good idea to look at the bigger picture. Looking at your retention on an annual basis instead of a monthly basis might be more insightful.

You can counteract customer attrition by broadening your product line or expanding on your current offerings to make them more applicable to customers out of season.

7. Your Offers Are Not Appealing

One way to reduce your rate of client loss is to provide them with the products or services they want when they want them.

When it comes time to renew your service, customers might be swayed by competitors’ offerings.

Customer Churn Analysis and Measurement

With access to customer data, you can analyze their behavior and determine which customers may be on the verge of leaving you.t.

Operational and Experience Insights

Analyzing both customer and operational data, such as repeated declines, decreased spending, and a low rate of answering customer support tickets can help predict a customer’s likelihood of churning.

A dissatisfied shopper who gives a low NPS score after their most recent visit is much more likely to leave.

Relational Feedback

By asking customers for feedback on their experience with your company, you can better understand their customer journey and what led to their satisfaction with your brand. By understanding this, you can improve the experience for future clients.

Transactional Experience Measurement

After you’ve collected feedback from your customers about their experiences, you can start measuring transactional experiences. This includes things like making a purchase or following up after customer support. This will help you understand where you have detractors and what you can do to follow up.

Customer Journey Measurement

You can measure the different key experiences that customers have throughout the journey, from when they first realize they have a problem to when they finally solve it. This can help you pinpoint the areas in the experience where customers might be experiencing friction.

When a customer interacts with your business, they’re experiencing a touchpoint. It’s critical to handle these interactions properly so they don’t decide to do business with a competitor.

Competition Analysis

It’s important to understand how you measure up against your competitors when trying to reduce customer churn. Take a look at their:

  • Pricing
  • New product offerings
  • Brand exposure
  • Share of voice
  • Customer engagement
  • Product ease of use
  • Upgrade and renewal offers
  • Sales tactics
  • Customer support facilities

Customer Segment Analysis

Knowing your customers better will help you predict their behavior and spot any patterns in their buying habits. Take the time to research your customer base, not just who they are currently but who they could become.

Customer retention and attrition rates change depending on the industries they occupy, customer longevity, pricing tiers, and product feature usage.

7 Ways to Manage Customer Churn

There are usually signs that indicate that a client is at risk of churning, so identifying these signs early on allows a customer success team to execute a proactive strategy to prevent this from happening.

This is the art of churn management — identifying customers who are on the verge of churning and taking steps to prevent them from doing so.

It’s important to identify points in the customer journey that typically lead to customers churning, and actively work to improve them. You can do this by tweaking the foundational aspects of your operations. Doing this will help to reduce the number of clients who leave.

Churn is unavoidable but can be managed. Think of it as a risk that can be mitigated just like any other.

Churn is caused most often by a bad experience. You can improve this by improving your everyday customer service.

Here are seven ways to reduce customer churn.

1. Track Customer Behavior

To gauge customer satisfaction, you should constantly track customer behavior. This can be done by looking at metrics such as product usage rates, feature adoption, license utilization, number of escalations, and Voice of Customer feedback.

2. Set and Celebrate Goals

Setting goals helps you and the customer understand where you are in the process. Milestones, such as the completion of training, or the implementation of a new feature, help track progress.

Acknowledging your customers’ milestones demonstrates your commitment to their success.

3. Accelerate Onboarding

Onboarding is a pivotal stage in the customer lifecycle. Concentrate on quickly moving your customers to a point where they can operate the product on their own.

The sooner your customers can start using your product or service, the quicker they’ll see results. Don’t overwhelm them with too much information, and answer their questions.

4. Acknowledge Any Problems

When a customer has a problem, it’s important to listen to them and work with them to find a solution to the problem. Accept responsibility for the issue, and provide additional training to your staff if necessary. Thank you for your feedback, and we’re sorry you had a bad experience.

Give customers a personalized message that acknowledges their issue and gives them clear next steps.

5. Share Customer Data

Your customers should feel like they have a personal support team that is always available to them. Every piece of customer information needs to be gathered, stored, and shared so that everyone has access to it.

This empowers every employee to provide customers with informed solutions, so they never need to repeat themselves.

6. Identify Changes in Customer Operations

By keeping in regular contact with your customers, you should stay aware of any significant changes in their team, such as a change in size or position. Also, consider how you will reach out to them when such changes happen.

Will you reiterate parts of your training program? Will you emphasize past successes?

Will you offer any additional training sessions or will you make new information available online?

7. Use a Customer Success Platform

The decision to renew or quit can happen at any point during the customer lifecycle. The experience customers have with your company plays a big role in these choices.

Tracking customers’ behaviors on a day-to-day basis, as well as week to week, is crucial.

Your customer success platform should pull in data from a wide range of sources and use this data to generate insights into your customers’ needs.

A customer success platform should have an early-warning system that can be customized to alert the company of any significant changes in customer health. This would help the company know when it is necessary to take action to keep the customer satisfied.

It should also include a directive from the management team on what to do.

The best way to keep churn low is to have a good understanding of your customer base. By being aware of any early warning signs, you can take steps to keep them engaged with your company. This will help ensure that they continue to see the value in what you provide.

These strategies for reducing customer churn are effective because they improve the value that your company provides to its customers. If your customers are getting a strong return on their investment, they will be more likely to stay loyal and less likely to leave.


How to manage customer churn? If you’re looking to decrease customer churn, a customer success platform can be a helpful tool. By tracking engagement and understanding why customers are leaving, you can make changes that will decrease your overall customer churn rate.

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