5 Steps to Reduce Your Churn Rate

By Arun Sivashankaran

conversion, customers, strategy

Can you imagine bringing in any new customers and still not growing your business?

It’s possible, especially if you’re operating a SaaS or other subscription-based business.

You work hard to convince people to give your business a chance, so it’s a shame to see subscribers drop off after a few months.

Instead of racing out to get more customers, have you considered what’s causing people to leave in the first place? Odds are you can make some simple changes to keep more customers loyal, happy, and paying.

reduce churn rate

Photo Credit: astrocruzan via Compfight cc

The Problem Subscription Businesses Face

Your ability to retain customers from month to month— minimizing your churn rate—is the lifeblood of any successful subscription-based business.

Churn rate can mean different things to different people, but at its core is measuring the percentage of customers who leave (cancel or stop subscribing) over a certain period of time.

The financial effects of a high churn rate are disastrous. First you have to consider the money it takes to replace the customers who leave. If you have a high churn rate, the revenue you’re pulling in from the churners is probably significantly less than the cost it took to acquire them.

So you’re forced to spend more and more money acquiring new customers to replace the old ones if you want any chance to grow. As a consequence the higher the churn rate, the lower the average lifetime value of your customers.

Getting Customers is Just Step One

Convincing someone to give your business a chance for the first time is the most difficult hurdle you’ll have to face. But it isn’t the only one if you’re running a subscription business: you have to get customers and keep them.

Many subscription businesses are so focused on reaching new customers and “growing” as fast as possible they overlook what it takes to keep people around. They chalk up a high churn rate as the price to play the game.

You probably can’t decrease your churn rate to 0%, but you can take measures to keep more people happy, grow faster than before, and build your business.

5 Ways to Reduce Churn and Keep More Customers

Here are 5 simple tactics to reduce your churn rate and keep your subscriber base healthy and growing.

1. Find Out Why You’re Losing Customers

This seems the most obvious way to reduce your churn rate, but many businesses fall short here.

They speculate and rely on their instincts about what went wrong instead of reaching out to the only people who can tell them for sure: dissatisfied customers.

Genuine customer feedback is an invaluable tool… if you make an effort to collect it. Feedback can give you insight into whether there are issues with your product or service itself, or if it’s the execution and support that are to blame.

You can find out what you’re doing well and where you could improve by reaching out over email or even the phone. Another thing you can do is to offer brief online surveys. Tools like UserVoice or Qualaroo can simplify this for you.

The best bet is to solicit feedback automatically when a customer cancels their subscription. Doing this—and responding quickly in the face of the feedback—gives you chances to salvage relationships with customers who didn’t understand how to use your product or service.

2. Keep Current Customers Engaged

As the online space gets more competitive, the overall quality of viable products or services is increasing. Customers aren’t as impressed by quality alone as they used to be. A quality offer is a necessary, but not sufficient, component of a low churn rate.

Assuming you’re already delivering on quality, one way you can distinguish yourself is through your customer service. For subscription businesses, this starts from first contact with the customer and continues indefinitely.

How can you give your customers an experience that makes them feel special from the very start? Delivering this won’t just help you acquire new customers; it will encourage existing customers to stick around because they know they can’t find that anywhere else.

You can also educate your customers better so they understand how to get the most value out of your product or service. Most won’t read instruction manuals or scour Q&A forums. That’s why you need to take matters into your own hands and provide that content. It could be video demos, blog articles, or free technical support; it’s up to you.

Quicksprout does a great job of this. Check out their Quicksprout University page, which offers a ton of free videos to teach visitors online marketing:

quick sprout university

The more people understand how to use your product or service to its full potential to get what they want, the fewer will churn.

3. Use Drip Email Campaigns

Drip email campaigns are great ways to keep people engaged with what you’re selling and coming back to your website. One way you can use them—going back to the last point—is to educate new customers about how to interact with your product or service.

Your new customers are busy; they don’t want to deal with multiple emails a day from you. But you can create a 2-3-email/week campaign to go over the basic features and gradually introduce more advanced ones. Give your product time to grow on people.

Another way you can use drip emails to reduce churn is to specifically target customers who haven’t used your product in a while and email them. Take a look at this re-engagement campaign template from Pardot:


Don’t just say hello. Give them a compelling reason to re-engage. It could be a limited time offer or special promotion. This costs a little money, but a lot less than losing a customer and acquiring a new one.

4. Downsell Customers to a Basic Offer

You might not be able to get someone to continue their subscription with your initial product or service, but you might be able to avoid losing their business altogether.

Do you have a tiered pricing structure? If you have an introductory version of your subscription-based product or service, you could offer it to customers when you receive their cancelation notice.

Your customers could range from individuals to large businesses with dramatically different needs. Giving people other options besides canceling is a great way to keep customers on board with a plan that suits their needs.

Rob Walling used downselling (among other strategies discussed in this post) to reduce Hittail’s churn rate by 7%.

downsell reduce churn

And there’s always the chance they could upgrade to a more expensive option later on.

5. Figure Out What Customers Can’t Live Without and Introduce it Early

The ideal situation for a subscription-based business is to offer something that gets engrained into a customer’s life or workflow. To become their provider of choice, and eventually, the one they couldn’t imagine going without.

Some things about your business are replaceable; your competitors could swoop in and fulfill those needs. But hopefully there’s something you’re giving people that no one else can.

What is that feature that makes your product or service “sticky?” Gather feedback from customers if you don’t know the answer to this. If you can’t identify anything sticky about your business, work on adding additional value until you can.

You can reduce churn by introducing that sticky feature to new customers as quickly as possible. Get them using it and seeing the benefits right away, and you reduce the chance of them leaving.

Start Reducing Churn Today

You might get as many new customers as your competitors, but if you can find a way to hang on to the ones you do bring in, you’re well on your well to success.

Make reducing churn a priority in your business. Don’t put it off until you reach a certain revenue threshold. You can start reaping the benefits from this as soon as you have a subscriber base, and they only increase when you add more subscribers to the mix.

What’s one thing you do to keep customers around after they start doing business with you? Leave us a comment below and let us know!

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  • http://www.ariasystems.com Brad Hog

    Thanks for Sharing your views. You can reduce churn and improve customer satisfaction with Reduce Churn Solutions. It helps to increase retention rates, maximize brand loyalty and keep your customers satisfied.