How to Reduce Churn?

How to Reduce Churn?

Reduce Churn


  1. Focus on your company’s products
  2. Constantly improve your product
  3. Invest in your staff
  4. Show your customers that you care
  5. Offer incentives

One of the top goals of business owners is to increase their profit margin. If that’s not one of their goals, then they should not be operating a business, but a non-profit organization.  There are a lot of strategies that businesses can employ in order to achieve their goal of increasing their company’s profit margin.

For one, companies can increase their products’ prices. This definitely works for companies who have not increased their prices since the time they started. By going over your pricing model, you may see that there is a need to increase your prices. In effect, this will increase your profit.

Another effective way to increase profit margin is to upsell. When people go to, say, McDonalds, they are always asked, “Do you want fries with that?” or “Do you want to upsize your drinks?”  Companies should always think about how to increase the value of their client’s purchases, and should find ways on how to get customers to spend more within a single transaction.

Companies also need to reexamine their workflows and eliminate activities and steps that are costly and don’t add value. Look at your onboarding process and see if every step is really necessary for your customers. You can also revisit your reorder process, and find ways on how to make it simpler and more cost-effective. Every money you save from cutting steps that don’t add value will go to your profit margin.

These are the three mostly used strategies in order for business to increase their profit margin. There is another strategy that is not that popular for businesses, but this can effectively help them achieve their goal of increasing profit margin. This is by reducing churn.

Churn in the business world is when an existing customer stops doing business with a company. When a customer closes his account, terminates his membership, cancels his subscription, or simply buy from another supplier, this translates to customer churn. To put it simply, churn is when you are losing your customers.

Why do this happen?

There are countless reasons why customers stop doing business with a company – they found a better deal with someone else, they are not satisfied with your products and services, or they simply want to try out something new. But it all boils down to one thing: your company has competitors, and you might lose your existing customers to them.

So how do you keep your customers happy? The ideal churn rate is 0%, and it is ideal in every sense of the word. 0% churn rate is not possible even for large corporations such as Microsoft, Apple, General Motors, and Toyota, to name a few.

Customer turnover is always present, no matter how big or small a company is, and no matter what industry you are in. The goal should be to at least reduce the churn rate, and keep it as close to 0% as possible.  

In this article, we have compiled five ways to effectively reduce churn in your companies. Read on for more details.

Focus on your company’s products


Customers do business with your company because there is a perceived need for your products or services. Even before the point of purchase, customers have certain expectations regarding your products, and when these expectations are not met, then customer churn happens.

Thus, an effective way to reduce churn is by focusing on your products.

Get to know your product – its features and limitations

Make sure that the right expectations are set during the first transaction with the customer. Communicate truthfully to your customers not only about the features of your product, but also its limitations. This way, customer expectations are managed well and when customers get to experience your product, expectations will somehow match reality.

This will entail educating your staff properly about what your product is all about. A staff that do not know major details about a company’s product is a major turnoff, and this will ultimately cause customers to leave your company. Again, make sure that your staff knows everything about the product, including its limitations and restrictions.

Constantly improve your product

In this world where everyone is coming up with something new every minute, it is important to keep your product up to date. When you fail to do this, another company will come up with a similar product that has a lot more to offer, and sooner or later, your customers will start buying the other product.

We could cite several examples of companies who refused to adapt to changes and has suffered the consequence. One such example is Kodak, the leading company in the camera industry in the 1900’s. It looked Kodak had everything in place – color film, Instamatic camera, handheld movie camera, etc.

And then the era of digital photography started. File sharing applications, software, and third party applications soon followed. Kodak, on the other hand, refused to move. It continued with its filmed camera business. By the 1980s, it was too late for the company.  Although it has tried to venture into other industries such as healthcare imaging, pharmaceuticals, and document managing, Kodak has never been the same.

Another story of a company who failed to innovate and ended up losing customers is Motorola. Motorola was the first company to ever manufacture and sell the world’s first ever mobile phone. In 2003, the company was at the top of the industry with its Razr.

However, Motorola did not venture into smartphones, and before they knew it, they are losing their customers to new mobile phone companies such as Apple, LG, and Samsung. While competitors saw the demand for phones that can handle email, internet, and other data, Motorola failed to adapt.

Now, the cellphone division of Motorola is not earning income and has been turned into a separate company so that Motorola can focus on its core products.

Invest in your staff


Your employees are the first touch of all potential customers.  Customers still talk to your staff even after a sales transaction. Thus, every company must see the importance of their employees. However, this is not usually the case.

Sadly, one of the first steps companies take when their business is not profitable is to retrench staff members. Others opt to spend less on their staff – not giving them bonuses, cutting some allowances and incentives, and the likes.

When this happens, employee morale become low, and employee’s see the company in a bitter light. Ultimately, this negative feeling towards the company will translate to how your employees treat your customers.

Your staff member’s behavior, tone, and their overall attitude towards the customer will reflect your company. When employee morale is low, customers can feel this in the way they are treated, and this is one of the major reasons why customers leave a company.

Therefore, it is wise to invest in your staff in terms of money and time.

Invest money on your staff

Allow your staff to join company-paid trainings that will help develop their skills. Offer rewards in the form of incentives and bonuses when they exceed their goals. Let your employees know that their career in your company can grow by giving promotions to deserving employees.

Invest time on your staff

It is not enough that you invest money on your staff. You also have to invest time on them. Schedule regular one on one meetings, to discuss anything that is work related. Take time to listen to them and let them know that you care,

Apart from this, group sessions can also help you get the feel of your staff member’s relationships with one another.

Show your customers that you care


It’s not always about all the big things, but the little things also matter. How long does it take for your company to respond to customer’s query? How often do you email your customers?

More and more companies are finding out that it’s the little things that keep customers coming back. Simple things such as follow up letters or emails, allowing them to reply to emails, and responding to their queries in a timely manner, will truly help improve customer experience with your company.

Here are a few tips on how to show customers that you really care about them.

Respond quickly

When an issue arises, prompting customers to contact you, make sure that you get back to the customer in a timely manner. No matter how small or big the problem is, the fact that the customer took time to write the email or leave you a message, should not be overlooked.

Quickly responding to customer concerns show that you care about them, and that you are working to solve the issue with them on your mind.

Talk to your customers

Most companies only get to talk to their customers when (1) a problem arises and the customer contacted the company first, and (2) the company wants to sell something more or something else to the customer.

However, it will be a breath of fresh air to customers if companies contact them regularly about things that are not related to the two items above. Send them email to ask how they are doing, and ask if there’s anything you can do to help. The following items will definitely let your customers know that you are there for them, always:

Feedback Bar

Feedback Bars are a great avenue for customers to leave comments, questions, and reviews. Customers mostly have questions or comments in mind, but does not have the energy or the will to contact your company.

But if your product has a feedback bar, they can easily drop off what’s on their mind.


If done right, you can get a lot of information from surveys. A lot of companies were able to innovate and see the unmet needs of their customers because of surveys. However, avoid making surveys that are too long. Thirty questions can significantly gather a lot of information about your customers, but it will not attract them at all.

Keep your surveys five to ten numbers long. More than that, and customers will not take the time to truthfully answer the survey.

New Feature Announcements

Social Media

Offer incentives


Special discounts and promo will most likely help customers decide to stay with your company. Incentives such as these will make them feel special, thereby preventing customers to churn.

You also need to balance this out though. Giving incentives to a customer who is not that great of a spender is not a good idea. So only give out discounts to customers who you know are spending money on your products or services.

Be honest

Everyone makes mistakes. Even huge corporations are bound to commit mistakes. So when this happens to your company, the only thing to do is to be honest. Admit your company’s mistake, apologize, and offer a solution to the customer.

Honesty is the best policy, even in the business world. Customers feel more secure to conduct business with a company who own up to its mistake, rather than play the blame game.

The Bottom Line

Customers these days have so many options to choose from. If one company is not making them happy, they can easily turn to the next company on the block. Thus, companies should strive to be the choice of customers.

Without customers, companies will be at the losing end. They will never reach the goal of increasing their profit margin, no matter how great their products and services are. Apart from attracting new customers, companies need to retain existing one and reduce churn.

There are so many ways by which a company can reduce customer churn rate. However, the most effective one is by improving customer service, investing on your staff members, and focusing on your products and services.

With these three things in mind, you can definitely reduce customer churn, and even make your customers loyal to your company.


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