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4 Tips to Reduce Customer Churn

Updated: Apr 13, 2022

If you are a sales or customer success leader, who has been fighting an uphill battle against customer churn, you are not alone. Customer churn – or customer attrition, can be a nightmare for many SaaS companies, especially as you grow and scale.

Although not all churn is impaired, reducing the overall turnover rate is crucial and healthy for your bottom line/net profit.

Did You know?

  • Churn rates often vary drastically for SaaS companies depending on their market segments. The chart below compiles statistics published by Tomasz Tunguz, a Venture Capitalist at Redpoint, on churn rates across different market segments. (Tomtunguz, 2015)

  • Acquiring a new customer costs most businesses 5 -25 times more than keeping their existing customer. Further study shows a 5% increase in customer retention rates leads to a 25% - 95% increase in profits. (Harvard Business Review, 2014)

Here are five tips to reduce customer churn and increase upsells that you can implement immediately.

1. Improve Onboarding Experience

After doing 340 customer interviews and analyzing 1.44M data points with our AI over the past year. The first time to value had the biggest correlation to churn. How fast and convenient your customers and users find success using your product determines their retention rate. The quicker your users associate your product’s core values as a solution to their problems, the longer they will stick around. Here are some best practices to get you started:

  • Send a personalized onboarding email to reemphasize the value you are providing.

  • Create simple product tours and avoid overwhelming your users with too much information

  • Perform routine check-ins with your new customers

  • Be accessible and available to help and assist customers along the way

Pro Tip: reducing churn starts at the moment of customer acquisition.

2. Understand Stages of Retention

A proactive approach to reducing churn is to understand your customers’ stages of retention. Proper understanding allows you to develop appropriate responses, set appropriate KPIs, and deploy relevant strategies to reduce customer churn and increase upsells. Dan Wolchonok – an Advisor at Reforge, experimented on customer retention, and the result broke down these stages into three categories as followed:

  • Early-stage: How can you ensure users use the product more than once?

  • Mid-stage: How can you create a pattern of usage?

  • Long-term: How can your product become indispensable to your users?

Pro Tip: timing is essential to identify the upsell opportunities.

3. Enhance Customer Success Management

Customer success is another critical factor in reducing the overall churn. Maintaining close communication and actively engaging with users will help you develop a deeper understanding of their problems. As a result, your firm can provide proper support, especially for at-risk customers. There are many channels you can utilize to engage with users. Depends on your niche and market segments, you can identify where your audience is the most active and choose the appropriate channels/messages to communicate with them. Here are a few platforms and their functionalities.

  • Facebook: Community-building contents

  • Instagram: Story-driven contents

  • Twitter: Business news

  • LinkedIn: B2B Marketing

  • Email: Weekly Newsletter

Pro Tip: Customers are more likely to stay with firms they often interact with.

4. Use Post Sales tools

Keeping track of extensive customer data and predicting their behaviors can be time-consuming and labor-intensive. Collecting data alone is challenging enough, let alone analyzing them into actionable insights. This process can take months and a lot of capital investment. Thanks to the rise of big data, firms can be more precise and efficient in decision-making while improving overall effort to reduce customer churn and increase upsell.

I am biased here as we have been building Involve.AI, which will turn your fragmented customer data to improve customer churn and upsells. Using smart AI algorithms, this application allows you to see trends, identify potential problems, and recognize early opportunities on a single dashboard.

Key Takeaways

Churn is a never-ending battle for your company, and it is inevitable. But having a deep understanding of customer success, implementing strategic plans, utilizing intelligent tools will help you win time and time again. Staying proactive in reducing churn rates will help improve your firm’s bottom line tremendously and remember:

Churn rates often come down to poor customer service and customers not realizing value fast enough, not the product.

What tips do you have for reducing churn?

Let me know in the comment below.


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Our AI predicts customer behavior with greater than 90% accuracy. How do we know? We test and measure the performance of our models regularly, in a variety of ways. Model training test accuracy - 94

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