reduce churn

What is Churn Rate?

In business terms, churn refers to the customers who do not do repeat business with you. In simple terms, it means the loss of customers. When customers churn, it means they stop doing business with you. Most likely, it happens when you fail to meet customer expectations.

The churn rate is a numerical representation of customer churn. It is calculated by dividing the number of customers who churned by the total number of customers in a fixed time interval.

Churn can be the single killer of your business! On the flip-side, creating raving fans can be the growth bed of success. Here are our top tips to reduce churn!

Free Churn Rate Calculator

Meanwhile, you can our free online churn rate calculator to see how much revenue you’ve been missing out on…

Failures are a part of every business. We face them every day at various levels throughout our businesses. Honestly, it’s okay to have a service failure at some point as long as you know where and how you have failed, before rectifying it swiftly.

Practically, it may not be possible for you to find each time a mistake is made from your end. If not for the customer you may never be able to find out about your shortcoming. For many customers who complain about their issues with you, there is a great number more who leave without saying a word. Can we afford to have such leaks in our nest of customers which we work so hard to attract?

Why Bother to Reduce Churn?

The most straightforward answer to this question is: No customers = No business.

Your business runs because you have customers who believe in you. Now it’s your responsibility to go above and beyond to satisfy those customers and make them loyal to your brand. In order to survive and to grow as a company, you need satisfied customers who keep doing business with you and also who refer you to others. This not only enhances your brand image but also increases the influx of positive revenue streams!

Did you know that the cost of acquiring new customers is far more than the cost of retaining customers?

Every wise businessman knows that reducing churn will not only help them cut on marketing and other acquisition costs but also save them lots of time getting to know the new customer base. Knowing your customers is the first step towards providing them with personalized customer experiences and wowing them in true sense.

3 Ways to Reduce Churn

Here are our top 3 tips to reduce churn and turning customers into raving fans!

1. Admit to your mistake!

It’s simple. If you’ve made a mistake you have to admit to it and apologise first and foremost. You have to own up to it. This helps your customer realise that you take ownership and are a company that they can trust. Trust is what we are trying to generate between our business and customers. However, here’s the catch; apologising on its own is not enough and alone it will not prevent churn! For that, we have to go to step 2…

2. Rectify the issue

reduce churn

Now, whatever mistake or shortcoming has been made, you need to go ahead and rectify that as quickly and painlessly as possible. For example; if you’ve given your customer a stale muffin or a horrible tasting coffee, you need to give them a fresh muffin/nice tasting coffee. When you do that, you have levelled the playing field. You are now on equal terms. They expected a nice coffee, you let them down, you apologised and then rectified the mistake. You are now back on level terms.

This often is enough to prevent churn but you may have left a bad taste in the mouth (no pun intended!) of certain customers who expect you to get it right every time. Next? How do we make sure we don’t lose this customer? Here’s the finisher…

3. Go above and beyond!

This is the icing on the cake, you take a situation like the one mentioned above where you have dropped the ball or messed something up. After you have apologised and fixed the problem, you need to now create a WOW moment for your customer. Something they are not expecting! You can, for example, give them a free chocolate bar or a free voucher for their next visit. Dependent on your business, what is it that you give them to show them you are willing to go above and beyond?

The power in this is that they will see how you’ve gone the extra mile for them, you truly do care. Guess what – they will continue telling this story to many of their friends and family! This will drive great loyalty and trust into your business and fundamentally that customer is not going to go anywhere else. He/she will continue to buy that product off you as well as share their good experiences with your brand. That’s the power of doing service recovery correctly – your customers become more loyal than they were before the issue arose.

Look, we all make mistakes! Although we try, we are not perfectionists. The key, however, is making sure we own up, fix the problem and go the extra mile. Let them have an experience with you which will leave a lasting and memorable effect on them. It’s very costly to win back a customer you’ve once lost or replaced them with new ones. As a business, identifying the causes of churn should be done proactively and reducing such churn should be made a priority.

Always make sure you are seeking out moments where your service has failed. Value those customers who share their feedback. Make an effort because without digging you will never be able to figure out which customers are facing issues and why – let alone improve on them! The bonus is – as we discussed – by preventing churn you now have the amazing opportunity of creating a life-long raving fan for your business – two birds with one stone!


Reducing churn rate is vital for your business. We can’t survive if we keep leaking customers out of the door. Once we keep them we want to make sure we generate raving fans amongst our customers such that they start shouting about our business to their networks. There is no greater source of gaining a new customer than through a close recommendation from a raving fan.

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