Reduce Customer Churn Now: 13 Practical Ways To Move The Needle
There was a time when BlackBerry, the electronics manufacturer, was the undisputed smartphone champion in the business world. But in the late 2000s, Apple and Android entered the arena, armed with cutting-edge, user-friendly devices and operating systems. BlackBerry didn’t adapt. Its market share shrank from 20% in 2009 to a minuscule 0.1% in 2016.
Customer churn—the rate at which customers leave your business—can be a silent killer. When it goes unchecked, as in BlackBerry’s case, it eventually destroys your company. If you’re seeing signs that users are leaving, your biggest priority needs to be to reduce your customer churn rate fast.
Here’s the good news: proven retention-enhancing methods can quickly move churn in the right direction. In this article, I’ll take you through 13 practical ways to reduce customer churn, sharing real-world examples along the way so you can visualize how each strategy might help you fight churn in your own business.
1. Attract the right customers from the start
Many churn problems start at the beginning of the customer journey. If your customer acquisition efforts aren’t targeted, you can easily end up with customers who were never the right fit for your product.
To avoid this, create marketing campaigns that appeal to your target audience. Identify the key features, pain points, and values that matter to your customer base, and craft your messaging accordingly. Better-fit customers and reduced churn aren’t the only benefits—targeted advertising is much more effective, in general, than non-targeted advertising.
Customer personas are the best way to refine your marketing messaging for various subsets of your target audience—and they can drive serious results. Skytap, a cloud automation provider, increased its leads by 124% by segmenting its audience into customer personas. The more personalized and relevant your messaging, the more likely it is to resonate with the right customers.
Testimonials can increase conversions by 34%, but to reduce churn you need to make sure your testimonials are tightly aligned with your target audience. For example, if you want more enterprise customers, don’t include testimonials from consumers on your sales page.
Example: HubSpot
HubSpot, a CRM and marketing automation tool, has a wide variety of target customers: sales managers, marketing directors, customer service teams, operations teams, and more. Instead of trying to appeal to everyone at once, they created a variety of free tools to help each customer persona. By addressing their ideal audience’s pain points for free, they’re able to build trust and open the door to sales later on.
Below is HubSpot’s landing page for sales teams, one of its primary target audiences. The landing page prominently features HubSpot’s free sales prospecting email templates.
2. Create an unforgettable first impression
An unforgettable first impression means new customers are more likely to engage with your product. This makes them more likely to stick around long-term.
Your first impression starts with your website, app, and marketing materials. 94% of first impressions are design-related. The right design can convey what your brand is about and help attract your target customers.
Onboarding is even more important. By this point, customers have given you their email address and may have already paid you. They’re invested. It’s time for you to return the favor with a personalized onboarding experience that gives immediate value and never leaves customers wondering what to do next.
Consider extending your free trials to give customers more time to start getting value. Bonjoro, a sales tool, found that 80% of their customer attrition was coming from people who signed up for a paid subscription, barely used the product, and then canceled within 30-90 days. By allowing free users to extend their trial until they had a chance to fully use the product, Bonjoro reduced their churn by 60%.
Take a close look at each element of the initial customer experience—marketing, design, and onboarding—and make sure each step is carefully crafted with retention in mind.
Example: Apple
Apple has one of the most loyal user bases in the world, with 92% of iPhone users reporting they are “somewhat or extremely likely” to stick with the brand for their next smartphone purchase.
While there are many factors in a high customer retention rate, a key element is user experience—and Apple’s attention to detail is meticulous from the start. Its product unboxing experience feels premium, leaves a lasting impact, and exceeds customer expectations from the moment the box is opened.
3. Make onboarding simple
According to PwC, 32% of customers will walk away after one bad experience. It’s especially easy for this to happen during the onboarding process when customers haven’t yet gotten much value from your product.
Streamlining your onboarding process is a good start. Most customer success software can handle this for you, ensuring you guide customers through each next step they need to take. Interactive tutorials and walkthroughs help users quickly understand how your product is useful to them.
A high-touch onboarding experience, complete with 1:1 human support, can ensure new customers make it through the learning curve and get value quickly.
Example: Mailchimp
Mailchimp makes sure that no users fall between the cracks during onboarding by offering both low-touch onboarding and high-touch onboarding.
Most of their subscribers self-onboard with guided tours, templates, and step-by-step instructions. But even with 11 million customers, Mailchimp still offers the option to set up a call with an Onboarding Specialist in order to keep churn rates low.
4. Create a roadmap for your new customers
When you’re not sure what success looks like, it’s hard to achieve it. That’s why user-focused companies provide clear roadmaps for customers, guiding them to the steps necessary to realize the value of your product or service.
Roadmaps can be as simple as a step-by-step list of what to do next during the onboarding process. Many products also benefit from separating new customers into segments based on their interests and then guiding them down different paths.
By putting clear milestones into place, users will understand how to get the most out of your product—not only during the onboarding process but in the long term. For example, by “gamifying” your user experience, you can motivate users to stay engaged.
Example: Ezoic
Ezoic, an ad technology platform, uses badges and gamification to recognize users’ achievements and give them concrete ways to keep engaging with the product. Since achievements unlock product perks, existing customers have an ongoing incentive to keep using the product in new ways.
5. Keep your best customers happy
Sometimes the best thing you can do to improve retention is double down on your best customers. Some users are going to churn regardless of what you do—maybe they weren’t a great fit for your product, maybe their needs changed, or maybe their budget decreased.
Don’t let your efforts to “save” each and every customer distract from the more important work of creating an amazing experience for your most loyal customers. Happy customers are more likely to continue using your product, recommend it to others, and contribute to revenue growth.
One churn-reducing step you can take right now is to assign dedicated customer success managers to your best customers. This guarantees personalized attention and support. Plus, it makes your best customers feel special.
According to Accenture, 48% of consumers expect special treatment for being good customers. Find as many ways as you can to show your top customers that they matter.
Example: Adobe
Adobe, the design software company, gives its Enterprise customers dedicated account managers and hosts exclusive events for enterprise partners. Adobe partners with companies like Quicken Loans, Home Depot, and IBM on in-person events called “Creative Jams.”
These events help Adobe create stickier relationships with these enterprise customers, while also educating each company’s employees on the latest ways to use Adobe software.
Source: Adobe Enterprise
6. Know who your at-risk customers are
Even your best customers can drift away over time. That’s why it’s important to figure out a system to identify and monitor your at-risk customers, which you can do by building a churn prediction model.
Clients often churn because they aren’t getting much use out of your product or because they’re dissatisfied with your service. Both these problems are trackable. And, if you set up the right systems and address them proactively, both problems may be fixable.
First, tracking. You can track customer satisfaction with regular surveys and customer service metrics like Net Promoter Score (NPS). And by monitoring your platform’s usage data, you can see how long it’s been since users have logged in and how much they’re engaging with your product.
Second, proactive intervention. If product usage drops over a period of time, or customer satisfaction metrics start to decline, it’s time for a conversation with your customer to learn more. If you have dedicated customer success specialists, make sure they check in regularly with clients to get a sense of how the relationship is progressing.
Example: Duda Mobile
Duda Mobile, a website builder, has an onboarding email sequence that kicks off when you create an account with them. Based on your usage of their platform, they can also see how much progress you’ve made.
After creating an account with Duda Mobile—and then failing to finish my website—they sent me the email below. Most likely, I was flagged as an at-risk customer in their system.
7. Watch the competition and stay competitive
At its peak, the social network MySpace had 75 million users. But as competitors like Facebook grew, MySpace failed to innovate. Today, it still exists but its user base has shrunk by around 92%, while Facebook’s audience has grown to three billion.
If a competitor offers better features, better value, or both, customers will naturally flock that way over time. By continuously monitoring competitors, you can identify emerging trends, potential threats, and opportunities for growth.
Rather than copying and pasting your competitors’ features, lean into the unique angles of your product. Look at LinkedIn, for example—the new features it releases are entirely different from those on Facebook, Instagram, or TikTok. LinkedIn focuses only on what matters to its audience of professionals and job seekers.
Example: Canva
Graphic design used to be painstakingly difficult. Creating a flyer, for example, meant firing up Adobe Photoshop and designing something entirely from scratch.
Canva, a graphic design tool, made the process easier with thousands of premade templates and a simple user interface that non-designers could use too.
With the advent of generative artificial intelligence (AI), Canva launched a suite of AI design tools that made the process even easier. For example, a tool called Magic Edit lets you add anything to your images just by describing what you want.
8. Remind customers of your value
As good as your product may be, life gets busy. You aren’t always on top of your customers’ minds.
If you’re not careful, customers can drift into a “what have you done for me lately?” mindset and start toying with the idea of switching to a competitor.
Reminding customers of the value your product gives them makes them less likely to switch to competitors. Here are a few ways to do this:
- Share customer success stories: Showcasing the achievements of your customers reminds your audience what’s possible and builds trust, making users more likely to stick around.
- Provide regular updates on improvements: You’re constantly improving your product—but if you don’t communicate that, your customers will never know. Give users practical examples that show how your new features are valuable to them.
- Give customers a monthly or annual recap: It’s no accident that churn often happens when customers are billed. To avoid this, identify the value customers have gotten from your product. Then, frame that value against the cost of the renewal.
Example: Chase
Chase’s Sapphire Preferred credit card costs $99 a year. Each year, I get a letter from Chase detailing the specific annual value the card has provided to me. And each year, the value it’s given me is higher than $99—so I keep renewing.
If you manage to create a no-brainer contrast in value like this, your churn rates will improve.
9. Offer long-term contracts
When considering churn reduction options, don’t overlook annual contracts.
ProfitWell compiled data from 941 SaaS businesses and found that companies that emphasize annual contracts tend to have significantly lower churn. Companies with under 10% of their customers on annual plans had an average churn rate of 7.5%. Businesses with 75-100% of users on annual plans had an average churn rate of 3%.
Annual contracts are so valuable for churn and cash flow that many businesses offer discounts to incentivize customers. You might also consider offering an expanded feature set to customers on your annual plan, or improved support.
Whether you emphasize annual or monthly contracts, make it as easy as possible for customers to renew their contracts. Ideally, this step should happen automatically.
Example: Bench
Bench, an accounting firm, uses a few techniques to nudge customers toward annual plans.
First, the design. “Annual contract” is the default option selected, so the lower annual price becomes the anchor. It’s impossible to ignore the fact that the annual price provides more value.
10. Provide fantastic customer service
According to a report by Zendesk, half of customers would switch to a competitor after one bad customer service experience—and 80% would switch after two or more bad experiences.
If customers are already unsure about your product’s value, a poor customer service experience will be the only reason they need to leave. That’s why one of the best ways to reduce churn is to invest in fantastic customer service.
There are plenty of strategies here. Zappos, for example, is famous for encouraging its customer success team to chat leisurely with customers, which has resulted in hours-long calls.
If you can find a meaningful way to go above and beyond for your customers, do it. But remember—you can also earn serious points just by nailing the basics of customer service with consistency.
- Build a comprehensive knowledge base: 81% of customers try to take care of support issues themselves, according to Harvard Business Review. By building a knowledge base that answers every possible customer question, you’ll have happier users and fewer support inquiries.
- Make sure you’re available: Sometimes the knowledge base isn’t enough. Make sure you’re available in all the ways customers want to reach you. For some businesses, live chat, email, and phone are enough, while others need an active customer service presence on social media, too.
- Be proactive: Work to identify signs that customers may be struggling, and try to help them proactively. Once customers reach out, be as fast and efficient as possible about resolving their issues.
Example: Freshdesk
Freshdesk, a popular customer support platform, does the basics of customer service extremely well. Their knowledge base is comprehensive, with articles and walkthrough videos covering frequently asked questions for all products they offer.
When customers have further questions, an AI-powered live chat helps them navigate the knowledge base. The live chat assistant can also pass users off to a human support rep by chat or email.
11. Ask for customer feedback
Customers love it when you ask for their input—according to a Microsoft survey, 77% of customers have a more positive view of brands that ask for their feedback.
Gathering feedback also keeps your product relevant to your audience. By asking customers what they like and don’t like, you can align your product with your users’ needs.
The trick is to make it as easy as possible for customers to provide feedback. Use in-app surveys and feedback forms, and make sure you don’t ask for too much of your customers’ time. Social media sentiment analysis is another way to gather valuable insights.
Once you’ve gathered feedback, take action. Let customers know you’ve heard them. Be transparent with the results of your surveys, and share product development roadmaps so your users know their requests are being worked on.
Example: Brain.fm
Brain.fm is a music productivity app. I use it every day while working. Brain.fm’s product marketing team reached out to me for feedback with the goal of improving the experience for “power users” like me.
I love the product, and probably would have filled out the survey anyway. But what hooked me was the fact that they noticed that I’m an especially frequent user of their product.
Since it felt like my feedback might actually be used to improve my own day-to-day experience with the product, I was motivated to respond. If you can segment and personalize your customer feedback requests like Brain.fm, you might find customers are more willing to participate.
12. Give customers a reason to stay
If you’re not giving your customers a reason to stay, you can be sure that eventually, your competitors will give them a reason to leave.
Fortunately, there’s plenty you can do to make customers want to stick around.
- Offer incentives: Rewards, discounts, free features—the options are endless. Make sure customers know they’re appreciated, and provide them with meaningful incentives that make your product even more attractive.
- Create loyalty programs: The next step up from one-off incentives is a full-fledged customer loyalty program. Loyalty programs can encourage members to stick around longer and spend more—members of the Starbucks Rewards program drive over 50% of the company’s revenue in the US.
- Appreciate your customers: Your customers want to feel like their loyalty is appreciated. Find a way to do that, whether it’s with free swag, exclusive in-person events, or personalized support.
Example: Airbnb
In 2019, Airbnb emailed me saying they’d be sending me a one-year subscription to Airbnb Magazine as a free perk.
Now honestly, I’m not a big magazine reader. Even so, the idea that this was an exclusive perk still meant something to me: Airbnb said I was part of a select group of people who were getting this benefit.
My takeaway? The recognition you give customers—and the fact that you included them in an exclusive group—can be just as important as the content of your perks.
13. Create a community
Communities ease the pressure on your customer support team, encourage consistent user feedback, and generate user-generated content.
Most importantly, they also reduce churn by making your brand stickier with users. Creating a community around your product fosters a sense of belonging and support that’s difficult to replicate if customers switch to a competitor.
Forums or social media groups are the easiest places to start. Encourage customers to help each other with product questions and share their experiences. Make an effort to highlight success stories shared in your community to deepen customers’ sense of belonging.
Example: Peloton
Peloton, a fitness equipment company, has a stunning 92% annual retention rate. The brand has built a thriving online community through its member forums, social media groups, and live classes.
Harnessing the Power of Retention
Reducing churn starts with attracting the right customers.
Once you’ve done that, there are dozens of churn-busting techniques you can experiment with. From creating an unforgettable first impression to monitoring your at-risk customers, these customer retention strategies are designed to help your business thrive in the long run.
Remember, churn isn’t just a short-term numbers game—it’s about creating an environment where customers can grow and succeed. Because the more you dig into the causes of churn, the more you understand that what’s good for your customers is good for your business.
Interested in more ways to keep your customers satisfied and reduce churn? Make sure to subscribe to our newsletter and get the latest CX tips.
Related read: Best Customer Satisfaction Software