A‌ ‌Guide‌ ‌on‌ ‌Importance‌ ‌of‌ ‌Lowering‌ ‌Churn‌ ‌Rate‌ ‌in‌ ‌a‌ ‌Customer‌ ‌Success‌ ‌Process‌ ‌

Customer Success Process

The way a company manages to maintain its customer retention rate plays an important role in its success. Businesses that fail to maintain a healthy relationship with their customers cannot survive in today’s customer-focused business era. Customer acquisition also helps a business create a great reputation without spending huge on acquiring new customers. Delivering an outstanding customer experience can ensure healthy business metrics, a satisfied customer base, and an unfair advantage over competitors.

Suppose you are looking for effective ways to augment customer experience, drive revenue, and lower churn rate. In that case, this blog might be helpful for you to know the best practices for a successful customer-business relationship.

About customer success process

Whether it’s a startup or a well-established company, customer success processes shape the foundation of every organization’s success. A customer success process is a tactic for providing and strengthening value after the completion of a sale. The process comprises all the essential steps and practices that ensure complete customer satisfaction regarding a product or service. In all, a customer success process largely focuses on customer retention and support. 

Key functions of customer success process management

A successful customer success structure is far more than a superior customer experience. Instead, it combines customer emotions with business outcomes.

Improving retention by reducing churn rate

Every business works intending to reduce churn rate and enhance customer retention rate. So, what do you mean by churn rate? Well, a churn rate is a rate at which customers discontinue purchasing or unsubscribe to a service. It can be determined easily by dividing the number of customers lost by the number gained in a particular period. 

Formulas for calculating churn rate: 

  • The account-based formula for calculating churn rate is: (number of customers at day 1 – number of customers at day 30) ÷ (number of customers at day 1)
  • On the other hand, the revenue-based churn rate formula is: (revenue at day 1 – revenue at day 30) ÷ (revenue at day 1)

If the rate comes negative, it represents revenue growth. On the other hand, a higher churn rate may lead to slower business growth and decreased revenue.

Key reasons behind increased churn rate and ways to decrease it

Some of the key reasons behind increased churn rate include: 

Bad customer experience: One of the key reasons a customer leaves a brand is their experience from that particular brand. As per some research by the U.S. Small Business Administration and the U.S. Chamber of Commerce, about 68% of customers leave a brand because they are unsatisfied with their treatment. The worst thing is that most dissatisfied customers do not leave the brand quietly. Rather they tell their bad experience to other people. This creates a bad impression about the company in the eyes of other potential customers as well, negatively affecting the success of a company. 

Today’s customers expect prompt, polite, and user-friendly communication from the brand they deal with. They like to feel engaged and appreciated. The only way to achieve this is by adopting a personalized approach. Customized content and messaging services give the impression that a company pays attention to customers’ individual needs. A personalized approach helps traditional marketers to acquire customers at a faster rate. 

Not creating enough value: Another key reason behind the increased churn rate is that businesses do not generate enough customers. Here value doesn’t mean the price; instead, it encompasses the whole customer experience. According to some reports, it has been observed that more than 55% of customers wouldn’t mind paying extra if they are getting a better service experience instead of just opting for the lowest price. 

To create better value, what businesses can do is provide personalized incentives. This is because the incentive that one customer feels valuable may have importance for the other customer. Therefore, personalized incentives can help businesses keep each customer happy and satisfied. To deliver valuable incentives or offers, it is important to determine the key likings of customers by analyzing their journey, buying patterns, and the offers they like the most. Customizing approaches is the most effective way of delivering good value to the customers. 

Wrong or poor quality communications tactics: Communications play a vital role in creating and maintaining a healthy relationship with customers. Without proper communication, a business cannot achieve its desired goals. Poor or unpleasant communication may lead to a higher churn rate. For instance, sending emails to inform customers about an offer or services can be the best way to inform customers about the ongoing deals and offers. However, if these kinds of emails are sent too frequently, it might irritate customers. It is observed that about 35% of customers unsubscribe from emails just because they are sent too frequently. Similarly, sending irrelevant information to customers via email, text, or voice can also annoy customers. 

To avoid making customers annoyed, businesses must stop spamming practices. Sending information carefully based on the needs and interests of customers is the best marketing approach. Whatever messages are sent to the customers must carry some value or serve a specific purpose. These purposes can be a greeting message or detailed information about a brand. Here also, businesses must be focused on personalized and quality communication over quantity. 


These are some of the key reasons behind the increased churn rate and ways to prevent such conditions. If businesses can control the churn rate, the retention rate will increase automatically. And as mentioned above, retaining existing customers is much more beneficial and cost-effective than attracting new ones. To conclude, what matters the most for a successful business is delivering an exceptional customer experience throughout the customer journey. 

Recent Posts