How to fight customer churn
Churn relates to the loss of customers or revenue through subscription cancellations. There are a variety of reasons customers churn. It’s important to understand the root causes so that you can begin to address the issues. Ultimately, the best cure for churn is product adoption.
How to find your services’ AHA moment
After evaluating customer feedback, create a list of behaviors that correlate with customer retention. Next, use this list to define your activation metrics. These metrics are individual and vary from service to service. Examples for activation metrics are “10 app usages per month” or “adding two friends within the first week.”
• interact with the core feature
• connect with other customers
Once you complement your customer feedback with your analytics data, it should be clear where people find value in your service. One of the best methods to bring customers fast to the AHA moment is onboarding.
Another way to fight customer churn is to monitor early warning signs.
• Taking much longer to complete tasks than average customers
• Shorter visit times
Once you track those metrics, it is easier for you and your team to find the underlying motivation why your customers churn and provide action steps to avoid this.
Customer churn is closely tied to customer satisfaction. Therefore, keep an eye on the Net Promoter Score to complement your insights for customer churn. This approach provides a holistic view of whether customers like your service and whether they would recommend it to others.
How to calculate customer churn rate
Customer churn rate = Customers who left in one month / Customers at the beginning of the month.
For example, if you have 400 customers at the beginning of January and 100 customers stopped doing business with you in January, your customer churn rate is 25%. (100 / 400 * 100 = 25%).
How to reduce customer churn
• Provide an exceptional customer experience, right in the beginning
• Provide value regularly
• Be transparent with customers
• Ask customers for feedback to improve your service
• Learn from churned customers