11 Tips to Reduce Customer Churn Rate

Sep 5, 2023

~8 min read

Reducing the Churn Rate

Every single company on the planet has lost a client at some point. Any business owner can tell you that getting new customers is much simpler than keeping existing ones. And the lower your customer churn rate is, the more successful your business will be.

Essentially, the customer churn rate is equivalent to the percentage of customers that walk away each year or during a determined time period. It is an indicator that helps evaluate just how successful a business is at retaining clients. And the main reason why customer churn is so important boils down to expenses.

Why reduce customer churn?

The more customers you have, the higher your expenses are. As a result, it is in any company's best interest to reduce customer churn as much as possible.

But you don't have to only take our word for it. There have been studies done on the subject that provided some remarkable insights:

  • According to a Harvard Business School study, a 5% increase in client retention may improve earnings by 25% to 95%.

  • Forrester also found that it costs five times more to recruit new consumers than it does to retain existing ones.

How to identify customer churn?

There are a few ways to find out what the client-retention rate is at your company:

Chances are your business already knows who has left by using analytics tools like Google Analytics. However, if you don't have specific data on those customers leaving and why, we suggest conducting an exit poll or exit survey. This way you will know what caused their departure and what changes should be made in order for others to stay. 

The goal here is simply to learn more about what kind of service was provided and how satisfied each individual customer might be; because chances are there will always be some degree of dissatisfaction from someone at one time or another during their relationship with your business.

Another way is to evaluate what your churn rate has been over time, which can be achieved by monitoring the number of customer complaints or requests for service you receive each month. Measuring what percentage of clients leave should help you better understand what aspects are causing this loss and how to fix them before it's too late.

Find the best customer exit survey instrument here.

How to reduce customer churn rate?

Now that you understand what customer churn is, how it can impact your business and you may identify it, we've put together this list of 11 helpful tips to help you reduce its rate:

1 – Determine what’s causing the churn

The most important thing to do is find what has been causing the loss of clients. If you can identify what aspects are driving them away, then you will know better how to fix it and prevent this from happening in the future.

Focus on what they want, not what you think they need.

It's very common for companies to focus on what they think is best for their clients, instead of what the client wants. And in doing so, they end up losing them when what would have satisfied their needs was something different.

2 – Learn about existing customers

Many companies tend to focus solely on what brings them new clients, but this is a huge mistake. You should instead always prioritize what keeps your existing customers satisfied and willing to come back for more. Implement customer feedback requests at different stages of the buying process (and not only during the purchase).

Make customer satisfaction surveys available to clients. If you want your customers' feedback, then make sure they know what's in it for them (and what not to say). Use incentives like small gift certificates or discounts as the prize for filling out a survey.

3 – Offer incentives

You know what makes your clients come back, so what you need to do is find out how they can be rewarded or compensated in exchange for their loyalty and repeat business. This way, they will feel appreciated and return the favor with excellent customer service that reduces churn rates even more.

4 – Reward loyal customers

This is one of the easiest ways to reduce customer churn rate, as it's also what makes your customers come back again and again: give them what they want! Create an exclusive club or membership for loyal clients where you offer special offers, promo codes, discounts, free shipping, or other perks they will enjoy.

5 – Optimize your customer service

Customer service is what separates good companies from great ones. This means that if you want to reduce customer churn it's important to have excellent, fast, and reliable CS. Invest in the right tools for this purpose (like chatbots or live chats).

You can even outsource your support team or provide incentives for clients willing to help others through their experiences with your company by posting on social media platforms like Facebook groups, Reddit forums, etc...

6 – Take complaints seriously

No matter what, always take complaints seriously and do your best to resolve them as fast as possible. Remember: you can't please everyone all the time so don’t go out of your way trying to fix every single complaint if it's not something that is going to affect most of your clients negatively. But when there are too many complaints regarding a certain aspect, then it would be better for you (and even more beneficial) to study what changes should be made in order for others like them to never occur again.

7 – Offer account managers to the most valuable customers

One of the best ways to reduce customer churn rates is by assigning a dedicated account manager for your most valuable customers. Ensure they receive the best customer service possible by providing them with dedicated account managers. This establishes an emotional connection with the customer and may also prove useful in collecting opinions and feedback directly.

8 – Have your best people handle cancellations

The best customer support professionals should always be responsible for dealing with cancellations as these are considered emergencies by most clients. They will also remember everything there is to know about the client which makes the whole process easier and faster so there's no room left for mistakes or miscommunication along the line.

9 – Show your competitive advantages

You know what sets you apart from your competitors, so why not use it to your advantage? Let your clients (and potential ones) know what makes you different by highlighting competitive advantages through social media platforms or any other marketing material. This way you can reduce customer churn rate and increase sales!

10 – Stay in touch with former customers

Furthering the business relationship after a client's contract or transaction has ended is one of the best ways to prevent churn. Don't alienate previous customers once they're off the hook for good: keep in touch with them on a regular basis (even if it’s just sending an email every now and then). A little attention goes a long way when reducing customer churn rates...and keeping loyal customers!

11 – Go the extra mile

This is what differentiates you from all the others: provide additional services and support that your competitors fail to do so. Check what they're not offering and invest in it! If there's a high demand for something, then be sure to offer it as an option (but don't go overboard with this one!).


As you can see, there are many things companies (and entrepreneurs) can do in order to reduce customer churn rates. And it is not always what you do but what you don't do that matters the most. So if there's someone out there willing to help, then why shouldn’t they? Furthermore, keep in mind that small changes can make a big difference on your journey towards achieving perfect customer service and building a loyal customer base!

Learn how to come up with the best customer exit survey questions and boost survey response rates. You can also create your customer exit survey with us by signing up today!