Top Reasons for Customer Churn in your Business

Customer Churn can be the biggest threat to your business.

Considerably worse than any competitor out there.

After all, it is impossible to grow your business if you cannot retain customers.

Today, we’ll review the top reasons why Customer Churn happens at your business.

What is Customer Churn?

First, a review of the basics.

Customer churn refers to the rate at which your customers leave your business and become inactive customers.

For example, let’s assume that your business works on the basis of monthly subscriptions. At the beginning of the month, you have 100 paying customers. By the end of the month, out of those 100, 10 of them have canceled their subscriptions.

This would mean your customer churn for the month was 10%.

Ideally, you would like this number to be as low as possible since acquiring new customers is generally much more expensive than retaining them.

Want to learn more about Customer Churn? Read our guide on Customer Churn and what it is.

Top Reasons for Customer Churn

Now let’s talk about the top reasons why customer churn happens at your business.

In fact, we’ve written a lot about this phenomenon in the past.

In general terms, the top 6 reasons why your customer churn happens at any company include:

• It’s too hard to contact your business: Are you implementing tools such as live chat to make it easier for your customers to contact your business?
• Your Customer Service is Weak: Are you tracking customer service and support KPIs? What’s your customer satisfaction score across the board?
• Your product or service no longer meets customer expectations: Are you collecting and analyzing customer reviews and testimonials? How are you implementing those learnings into your product and service?
• You provide few incentives for your customers to return: How are you working on increasing your customer retention? Are you implementing rewards and incentives for your customers to stay with your business?
• Your product or service offers less value than the competition: Are you actively reviewing the offerings and products of your competitors? What are they offering that your business is not offering? Are your customers leaving your business to go to theirs?

As we mentioned before, we’ve gone over this topic before. So, if you want to learn more about why customer churn occurs at your company, read our in-depth guide on why customers leave your business.

How to Reduce Customer Churn

After you understand the why of customer churn at your business, it is time to start looking for solutions to your problem.

Customer Retention is the opposite of Customer Churn. It is also the key to holding on to customers for longer.

Customer Retention strategies can look very different from business to business. However, we recommend your read our guide on 10 Customer Retention Strategies that Work and implement the ones that work best for your business.

Closing Thoughts

Understanding and reducing Customer Churn in your business can be the key to its long-term success.

It all starts with calculating your current Customer Churn and understanding why it’s happening.

Which customer retention tools will you implement next?