What Is Customer Churn Rate?

Are you feeling the pinch of customers leaving your business? Are you struggling to understand the how and why? Customer churn rate may provide the information you need. You may be asking – what is customer churn rate – and boostCX has the answers. This metric reveals the percentage of customers who stop using your service over a specific period and high churn can stifle growth. This quick overview explores customer churn rate and how boostCX empowers you to identify churn risks, improve customer satisfaction, and ultimately improve customer churn rate.

How To Improve Customer Churn Rate

Calculating your customer churn rate is a pretty straightforward mathematical equation. Divide the number of customers you lost in a set time period – typically a month or year – by the total number of customers you had at the start of that period. Multiply that result by 100 to express the result as a percentage.

Man Selecting a Smiley Face Rating

(# of Customer Lost ÷ Total Customers at the Start) x 100 = Customer Churn Rate

Businesses that want to know where they stand will find that a good churn rate is generally below the 5% mark – indicating a healthy customer base. Customer churn rates between 5% and 7% are considered average and anything above 7% is considered a below average or poor customer churn rate. How you classify your customer churn rate may vary based on your industry.

By understanding your customer churn rate, you can identify areas for improvement and take proactive steps to retain your customers. The most common causes of a poor customer churn rate include – price, user experience, customer experience, and the market fit – and this is where boostCX can help. Here are methods you can use to improve customer churn rate. 

1. Gather Customer Feedback

Gathering valuable customer feedback is the key to reducing churn. boostCX empowers you to  collect feedback through multiple channels and on multiple platforms – whether it’s surveys, social media, or direct engagement. Not only does this feedback help you understand customer pain points and frustrations and address concerns promptly – it allows customers to see that you care about their experience, fostering long-term loyalty.

2. Be More Proactive

Proactive engagement and communication is a powerful weapon against customer attrition. Use customer feedback to anticipate customer needs and address concerns before they arise. This helps you nurture trust and loyalty. Regular updates, personalized outreach, and addressing potential pain points proactively can significantly reduce churn and keep your customers happy and boostCX can help you engage with customers via a wide variety of channels.

3. Create a Customer Roadmap for Your Customers

Developing a customer roadmap for new or returning customers fosters deeper customer engagement at many levels. This roadmap outlines specific onboarding processes, ensuring a smooth start for new customers. By visualizing the customer journey through this lens and across these touchpoints, you can identify areas for improvement and proactively address potential pain points before they lead to customer attrition. This customer-focused approach builds trust and loyalty, ultimately reducing churn and driving business growth.

4. Analyze Customer Churn as it Happens

Waiting to analyze churn is a recipe for lost customers. Analyzing churn in real-time with  boostCX’s analytics is crucial to improving your customer churn rate. This allows you to see when in the customer journey the churn is happening – are they dropping off during onboarding, after a service issue, or at contract renewal? By understanding these critical moments of truth, you can act immediately with targeted communication, personalized solutions, or special offers. Proactive intervention based on real-time data is your best defense against churn.

5. Create a Community for Your Customers

Fostering a customer community can be a game-changer for customer churn rate. By creating a space for peer-to-peer learning and support – as well as customer engagement – you build brand loyalty and trust. This sense of community helps reduce customer churn rate by increasing customer satisfaction and making your customers feel valued beyond just a transaction.

READ MORE: What Is a Net Promoter Score (NPS)?

Do you have questions about how to improve the customer experience for your business? You may ask – what is customer churn rate? boostCX is here to help answer your questions and improve the overall customer experience at your business. Contact boostCX today for more information on our customer experience management solutions!