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Is Your Churn Rate Out of Control? Here's How to Fix It in 6 Simple Steps!

Updated: Feb 28

Customer churn is when customers decide to leave your business for good and switch to a competitor.

Let’s be real, this hurts worse than a break-up. 

But then again, every single business has lost customers. While you can't keep every single customer, you can definitely make an effort. 

Ultimately, the goal here is to minimize your churn rate as much as possible. 

Why Is Churn Rate Important? 

Getting new customers is really tough compared to keeping the ones you already have. 

Studies say it could be up to 25 times tougher!

Knowing your churn rate – how many customers you're losing – is like checking the pulse of your business. It tells you how well you're doing at keeping people on board.

When you put effort into keeping your current customers happy, it has a significant impact on your bottom line. Bain and Company conducted a study showing that even a small increase in customer retention – like keeping just 5% more of your customers – can lead to some serious benefits.

For instance, it can save you money because you're not constantly spending resources trying to replace lost customers. Plus, when customers stick around, they tend to spend more over time, which boosts your profits.

So, while you're out there hustling for new business, don't forget to give your existing customers some love too. They're the backbone of your success.

How Much Churn Is Too Much Churn?

Too much churn means you're losing more customers than you should be. It's like having a leak in a bucket – if you're losing water faster than you can fill it up, you've got a problem.

Generally, there's no exact number that applies to every business because it varies depending on the industry and other factors. Just think of it like this: if your churn rate is high enough that it's hurting your profits or making it hard to grow, then it's too much.

However, according to Lincoln Murphy from Sixteen Ventures, if you're seeing around 5 to 6 customers out of every 100 leave in a year, it's generally considered acceptable. If your churn rate is less than 3 out of 100, that's fantastic – it means you're doing a great job at keeping customers happy and sticking around.

Understanding your churn rate is important because it gives you an understanding of what's working well and what needs improvement in your business.

6 Steps You Can Take To Reduce Churn

Try Offering Longer Contracts

Offer longer contracts instead of month-to-month deals. You could have subscriptions that last six months, a year, or even longer.

Give discounts for these longer contracts. This way, customers can try out your products or services for a longer time while saving some money.

When people see how your offerings benefit them over time, they're more likely to stick around.

Send personalized emails to customers who've canceled, telling them about your long-term deals. 

For Example:

Let's say you run a meal kit delivery service. Instead of just offering month-to-month subscriptions, you could introduce plans that last for six months or a whole year. 

And to make it even better, you could give customers a discount if they sign up for one of these longer plans. This means they get to enjoy your delicious meals for longer, all while saving some cash a the same time!

And once they get used to having tasty, hassle-free dinners delivered to their door every week, they'll be more likely to stick with you for the long term.

Always Ask For Feedback

Adding a review section to your website is a great way to hear from both past and current customers. When they leave a review, send them a personalized email to thank them and encourage more feedback.

Always respond to reviews and questions with gratitude and respect, whether they're positive or negative.

You can also just reach out to customers directly and ask for their thoughts. This helps build your relationship with them and keeps them coming back.

Having a conversation with your customers can also help you figure out where they're having problems and how you can help.

PRO TIP: It's important to know when to ask for feedback and make it easy for your customers to share their thoughts. Reach out to your customers at the right times, like after they've made a purchase or used your service. This way, their experience is fresh in their minds, and they're more likely to give you useful feedback.

Identify Your Most Valuable Customers

It's important to recognize who your top customers are and give them special attention. Why? Because they're the ones bringing in the most revenue and are contributing to your business’s success.

One way to do this is by sorting your customers into groups based on how profitable they are, how likely they are to leave, and how open they might be to accepting offers to encourage them to stay. This helps you predict which customers might leave in the future.

Segmenting your customers like this helps you target them better and understand why some might be leaving more often than others. Once you know which group is churning the most, you can start figuring out how to address their concerns and keep them happy.

Reach the Right People

Even if you have great ways to keep customers, they won't work if you're getting the wrong people at the door.

What I'm saying is, if your first pitch is all about "free" or "cheap," you might end up with customers who aren't really interested in what you offer. These bargain hunters are likely to leave pretty quickly.

Take, for instance, when you host a giveaway on your Instagram. One of the requirements to enter is to follow your account. You'll likely see a spike in followers during the giveaway period. 

However, once the winner is announced, you may notice a drop in followers too. This situation is what you want to avoid. This strategy might work short-term but it’s horrible for long-term goals. Instead, aim for followers who are truly interested in what you post and share on your account.

Bottom line is, you need to target people who understand the value of quality and are willing to invest in it. Those are the ones you should be focusing on.

Highlight Your Unique Selling Point (USP)

The market is flooded with options nowadays, which is why churn rates are through the roof – customers can easily find alternatives elsewhere.

Now is the time to highlight your Unique Selling Point (USP). How are you different from other companies? What makes you stand out? And what will your customers miss out on if they stop using your products or services?

Answering these questions helps you figure out what makes you unique from the crowd. 

Think about what you do better than anyone else, or what makes you totally remarkable. Then ask yourself: Do your customers even know about it?

If not, it's probably time to start shouting it from the rooftops (maybe not literally). But the goal here is to let them know that they need you, not the other way around.

Price Wisely

If your products cost too much, you might scare off your customers for good.

But if it's too cheap, they might wonder if it's any good.

Getting your pricing right means figuring out what your customers are willing to pay. Check out what similar products or services cost and think about what makes yours special. 

Test out different prices and see how your customers respond. Offer options for different budgets. Keep an eye on how things are going and adjust as needed to keep your customers happy and sticking with you.

Make sure you set a fair price so people feel like they're getting their money's worth. Getting the price right can help keep your customers coming back for more, which is the ultimate goal here.

Final Words

In the end, keeping your customers satisfied is what keeps your business going strong. While you won't keep everyone forever, there are steps you can take to retain most of them. 

Remember, they're the lifeblood of your business, so prioritize their happiness and loyalty every step of the way.


Well, aren’t we glad you asked! We at DigiCom are obsessive data-driven marketers pulling from multi-disciplinary strategies to unlock scale. We buy media across all platforms and placements and provide creative solutions alongside content creation, and conversion rate optimizations. We pride ourselves on your successes and will stop at nothing to help you grow.


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