3 methods for reducing customer churn—and why it matters


Of the metrics that companies monitor, customer churn is a big one. Also sometimes referred to as turnover or attrition, customer churn is calculated as the number of customers who leave your company over a given time period divided by total remaining customers.

By highlighting those who leave, it also showcases by comparison those you retain. This can give you a good idea of how your company is doing at keeping customers on board.

But wait, you might say. Every business has customers who leave. It’s just part of doing business, right?

Technically, yes. You’d be hard-pressed to find a company that’s never, ever lost a customer. But what’s important to monitor with customer churn is the rate at which they’re leaving—because it can be painfully expensive to lose customers, especially if it’s a large number of them.

Why reducing customer churn matters

Customer churn is expensive.

You may have heard the numbers from the Harvard Business School that increasing a company’s customer retention rate by just 5% can improve its profits by up to 95%. That number, which originally came out 2000, inspired the rush for customer retention strategies that have created the customer service world we live in today.

As astonishing as that increase is, though, what’s more so is the actual cost associated with customer churn. This report shows that in 2016, for example, the estimated cost of customer churn for U.S. companies alone was $1.6 trillion—all because of the experience they received from companies.



Companies...often make it too difficult for consumers to get the right level of help and service that they need.

Robert Wollan, Accenture Strategy


And this is an unnecessary cost.

It’s hard to imagine losing that much money over something completely unnecessary, but it’s true. And it all comes down to the experience customers receive. In fact, in that same report, 83% of the people who reported they’d churned said that if the original company had provided better customer service, it would have impacted their decision.

And of course, then there’s the extra unnecessary cost of acquiring new customers to replace the ones who churn. You’ll need to bring them in to maintain margins. But according to this data from Invesp, attracting new customers can cost five times more than keeping existing ones, which can damage margins instead.

How to keep your customers on board

Learn why they’re leaving and address the issues.

Many consumers are happy to share why they’re leaving a company, so all you have to do is ask! You won’t get answers from everyone, but the information you do get will be invaluable. When they call in to cancel a service, try including a question about why they’re leaving in your support agents’ offboarding script. Or if they’re returning a product, either ask or include the question in a return request form.

Another good source is to read customer reviews on social media, through your store, or through third-party sites and aggregators. Customers will often leave reviews after leaving a service to share their experiences with others, which can give you an idea of the experiences they’ve had.

Once you start collecting answers, you can monitor them to see what exactly people are saying. You’ll likely notice a few themes, which will help you identify methods you can take to fix the issues that are pushing your customers away.

Focus on the customer experience.

Your customers have high expectations for the experience they receive from you. In fact, 73% of people expect customer service to be easier and more convenient than it is; another 61% want it to be faster.

It’s also important to consider that this isn’t just about what happens when customers are on the phone with your support team. A true customer experience is every possible touchpoint you have with your customers. It’s the resources you offer, your service/product, your onboarding process, everything.

Pro tip: Help your support team create the experience your customers are looking for with RouteThis. Learn more here!

Keep the lines of communication open.

Remember how we said that a customer experience is every interaction customers have with you? That comes into play here, too.

A positive customer experience isn’t something that’s going to happen on a support call or two. It’s a cumulative consideration of every interaction that customer has ever had with your company at any point in time. So it’s important to nurture the relationship you have with customers at all times through these interactions!

One key to building these relationships is to ensure you’re communicating with your customers outside of support interactions. For example, you know what resources you have available for customers, but they might not! Reaching out proactively, whether to share a resource, ask their opinion on a resource, or even just share best practices, can create a lasting, positive impression that they’ll remember the next time they see an ad for a competitor.


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