7 ways to prevent customer churn and up your margins in 2023

Maybe you’ve read the stats, but globally brands lose a whooping 1.6 trillion dollars every year to churn. A large chunk of that money can be saved and repurposed for other, more relevant ventures if organizations can keep their churn at a bare minimum.

The truth is acquiring customers is expensive; in fact, it costs more than three times more to attract new clients than to maintain an existing one. So the last thing you want is to lose your clients soon after you get them. However, it's quite unrealistic to have 100% client retention every year. But, if you can keep the number of users who stop patronizing your business low, it could translate to more growth, business expansion, and less financial and time expenditure on acquiring new clients.

But then, what should you do when a customer leaves or stops patronizing your business? Should you hurriedly get a new one immediately as a replacement? What you should do is first examine the conditions or situation that made the customer exit and fix it to prevent exit by other customers. But how do you prevent continuous churn? Let’s find out.

Let's begin by examining what customer churn is.

What is Customer Churn

Customer churn, otherwise referred to as "customer attrition," is a term that describes the drop in the volume of clients that patronize a business. It shows how many customers stopped patronizing a brand/business by taking actions like refusing to renew their subscription, refusing to re-purchase the brand's service(s) or product(s), or discontinuing their support for a business or brand.

Customer churn can be expressed mathematically as a percentage (%). This is known as the churn rate. To calculate this, divide the number of people that stopped patronizing your brand's products or services (at the end of a business season) by the total number of clients who initially patronized. Then, multiply the quotient by 100 to get the churn rate.

Let's say you started the business month with 250 customers, and at the end of the month, 30 of them stopped buying what you sell. Your customer churn, therefore, is 30, and your churn rate is (30/250) * 100 = 12%

Why Does Churn Matter?

To continually make a profit, you have to keep your churn rate low and increase your retention rate. This is because selling to existing customers is easier than selling to new prospects. You are most likely to have a 60%-70% success rate selling to already existing customers and 5%-25% likely to sell to strangers. Besides, increasing customer retention by as little as 5% can increase your profit by 25% to 95%. These show that, as much as possible, you should keep your customer attrition low.

So, here’s a summary of why churn matters:

  • Lower churn translates to increased brand trust,

  • When churn is low, your business gets more sales, which translates to more income. This also includes earning extra income from cross-sells, upsells, and patronage of the brand's related products.

  • You have lesser expenditure on customer acquisition when your churn level is low. Lesser client churn means that your business would spend less on paid advertisement and enjoy free referrals from present customers.

Having seen the benefits of reducing customer churn and why keeping the churn rate low is necessary, let's examine how to achieve this.

How to Prevent Customer Churn

Customer churn is not totally avoidable. It's almost impossible not to see a customer stop using a brand's product or service after some time.

However, the rate of clients exiting from a business can be managed and reduced by following age-long strategies that work.

Here are some of them:

1. Get the right user base

No matter how good your product or service is, churn is bound to happen unless you get the right customer. Hence, ensure that you carefully refine your client acquisition process to attract the right customer for your product or service. This way, you can prevent the likelihood of high user churn in your business.

2 Identify profitable customers most likely to churn and keep them.

You can achieve this by offering them incentives, gifts, discounts, etc. However, focus your attention on the profitable customers and not just on anyone who wishes to drop off but is of little value to your business.

3. Show your customers that you truly care

You need the customers more than they need you. Hence, make it a duty to prevent churning by reaching out to them occasionally with information that could help them solve their problems. If your product or service has additional features which your clients may need to be made aware of, let them know. If you'd have to recommend a third-party solution that complements your solution, do it. These show that you truly care about your customers' needs even when they don't ask you for help.

Tip: employ the Workee CRM tool to keep track of your clients and always communicate with them.

4. Remove onboarding bottlenecks

New product or service users may be overwhelmed if the entire process is difficult. Why not simplify onboarding using simple, easy-to-follow guides in multiple formats? Some people prefer a manual, others prefer a video, and others prefer a flowchart/pictogram/infographic.

Also, reduce the irrelevant steps and requirements during onboarding. Rather, use a simple and easy system that is devoid of ambiguity.

By simplifying the onboarding process, there is little chance that a prospect or customer would want to discontinue using your product or service.

5. Request customer feedback and leverage it

Knowing what your customers think of your product/service, their deep pains and where your product fails to solve them, the most desired features that your users need in your product, etc., can help you improve your product or service. So, collect feedback from your customers from time to time and use them to improve the overall value and quality of your business.

Tip: Use survey form to get your customers' feedback and easily visualize it with high accuracy and make quick inferences based on the feedback gotten.

6. Improve the quality of your product/service

With a new tool, idea, strategy, and technology in the market, disruption is bound to happen. Interestingly, this happens all the time. Uber disrupted the taxi business, Airbnb disrupted the hospitality industry, etc.

Hence, you must keep an eye on what's going on in your industry and run along with it, improving the quality of your service or product based on the market outcomes. Failure to do this means your business will stagnate, and your customers will look elsewhere for solutions.

Tip: regularly survey the market to see what your competitors are up to and adapt similar solutions and strategies to your business if they help meet your customers' needs.

7. Provide consistent excellent customer service experience

Many businesses suck at customer service, and this turns customers off very quickly. No one wants to speak to an insensitive, uncaring, harsh, incompetent, or time-wasting customer care rep. Rather, the opposite is highly desired.

If your business's customer service already sucks, the best to do now is fix it. If it's ok, then make it great; if it's great, keep it so while continuously improving it.

Tip: leverage Workee's video tool to interact with and provide your customers with real-time feedback and solution to their questions whenever they need assistance.


You've worked hard enough to acquire customers. Losing them soon after you get them is the last thing you desire. In other words, although customer churn is nearly unavoidable, you want the numbers to be low, say 1-3%, which is pretty good. The good news is that this is achievable if you put the recommendations and tips provided here into practice. Now, get to work and watch out for the result in a matter of weeks.

Ihor, CEO at Workee

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