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Churn Rate – Five Ways to Keep Customers from Leaving

The ability to keep customers is equally important for both startups and big businesses. Unfortunately, some clients just leave, and in order to keep your enterprise in the black you should understand the reasons why it happens.

The name for the number of customers who cut ties with your company or service is called the churn rate (the rate of attrition). Thus, people who stopped buying things from you and no longer interact with your service shape your company’s churn rate and reduce your income.

How to calculate the churn rate

The first step in taking control over your churn rate is to figure out how you can measure and express it.

The churn rate can be expressed in several ways:

  • Churn on a customer count basis
  • Churn on a revenue basis

You can use the same formula to calculate both of them. It is based on a particular period of time after which a client is considered inactive.

The customer count churn rate formula:

Say if you had 1000 customers at the beginning of the month and lost 200 of them by the end of it, then your churn rate would be 20%.

To calculate the revenue churn, use the following formula:


Imagine that you were earning $10,000 a month from 1000 customers and you lost 200 customers which were worth $1,000. Then your revenue churn is 10%.


Calculating the churn rate on a customer count basis is valuable because it indicates customer satisfaction with your product or service, while a revenue based churn rate reveals the financial impact. 

Why do customers leave?

1. Bad quality of products

Bad quality is one of the most common reasons why customers won’t stick with your brand.

Creating good quality products is time-consuming and will cost you a pretty penny, but your efforts won’t be in vain. The investment will soon pay off and you will be able to see the growth of income.

2. Unhappy with the service

Every day, millions of people are complaining about the service they are getting from businesses and services. Make sure that your employees are properly trained and qualified.

3. Lured by competitors

Your competitors can easily lure away your clients using bright commercials or higher discounts. However, people compare, so do your best to meet their expectations.

4. Clients moving house

Yes, people move. But you have the option to cater to such customers. If you have a branch office somewhere else, tell your customers about it.

5. Change of needs and interests

It is natural for people to change interests, needs, and preferences over time. Although these changes are individual, sometimes they can be brought by overall trends. Staying in touch with global and local trends in your industry and around it will help you understand what your customer wants.

How to keep customers from leaving

  • Be active

Ninety-one percent of customers are so-called “non-complainers,” so if something goes wrong they will simply leave without a word. Make the first step to communicate with them. Ask if they are having any difficulties and try to solve them.

  • Ask your customers about their preferences

A good way to send your customers the content they want is to ask them about it. Find a way to get answers from your customers, and be prepared that you need to give something in return for your customers’ time. A small reward, such as the discount for the next purchase, can become a good incentive.

Kate Spade offers to fill out a customer satisfaction survey in their email, complementing it with a 25% discount.


  • Provide an opportunity to leave feedback

Create a short form that is easy to fill in. Booking.com is a good example of it.

  • Reactivate sleepy customers

Define how often you want to do the general cleaning of your mailing list. The average “sleeping time” for customers is from 3 to 6 months.

Launch a reactivation campaign and see if the inactive customers react to it before you dismiss them.

Below, you can see the Rockport reactivation email encouraging customers with a 15% discount.


  • Automate the retention process

In some cases, it is obvious when exactly the customers are likely to leave you. It can be the end of the free trial period or another reason. This knowledge can be used to launch customer retention campaigns involving different engagement methods like special offers, discounts, and sales.


Such retention campaigns need to be prepared ahead of time by integrating your CRM and email automation.

At the end of the day, remember that your customers need to always be at the center of your attention. Get more information about them and ask for feedback. Communication is step one. Step two is analyzing and acting. You need to be very good at it.

Churn Rate – Five Ways to Keep Customers from Leaving

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