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How to Reduce Your Customer Churn Rate in 4 Steps

You can call it churn, the rate at which old customers leave and new ones arrive. Or, you might label it retention, the rate at which you keep the same clientele in your pipeline. Either way, most businesses closely watch the balance between the loss of existing customers and the acquisition of new ones.

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And with good reason: As Amy Gallo points out for the Harvard Business Review, it’s anywhere from five to 25 times costlier to bring in new customers than it is to keep the ones you already have. That’s no big surprise when you consider the time, effort and sheer expense it takes to acquire new customers, including awareness and outreach campaigns and other expenses related to sales and marketing.

Furthermore, Gallo points to a customer retention report from the man behind the Net Promoter Score (NPS), Bain & Company’s Frederick Reichheld, which concludes that increasing customer retention by as little as five percent can boost the profit of a business anywhere from 25 to 95 percent.

Those are huge numbers, underlining the need for any business to keep their customer churn rates as low as they can. But that’s easier said than done in a marketplace where online commerce has given shoppers an almost limitless range of alternatives. (According to consumer data firm Statista, businesses operating in retail, finance and travel have a particularly tough time with churn rates.)

But take heart: Today more than ever, a great deal is understood about the business-customer relationship, and industry experts are well-informed about what it takes to keep churn rates as low as possible. With that in mind, then, here’s a quick look at how to reduce customer churn in just four (relatively) simple steps.


Step #1: Focus on Improving Your Customer Experience (CX).

woman on mobile phone getting service from on demand contact center customer experience solutions

The better customer experience you offer, the more likely you are on retaining customers.


This may seem like a no-brainer, but in our experience, it’s still an underappreciated idea among too many business leaders. The better customer experience (CX) you offer, the more likely you are to retain customers and keep your churn rates as low as possible. It really is as simple as that.

By offering a positive CX, we’re really talking about giving customers a level of service that’s accessible, easy to use, friendly, and, most of all, effective. In other words, it must accomplish what they want it to do when they first contact you, and quickly, with as little effort as possible on their behalf.

But with all of the options available to today’s consumers, they’re growing increasingly more demanding about the service they receive. According to a report from the American Express Customer Service Barometer, more than half of American consumers say they have abandoned plans to make a purchase after just one instance of bad service from that company.

On the other hand, though, that same report points out the truth of the reverse—that by offering a great CX, customers will be more likely to stay with a company. “Seven in 10 U.S. consumers say they’ve spent more money to do business with a company that delivers great service,” the report authors write.

Step #2: Enlist the Help of Professional, Knowledgeable and Friendly Customer Care Agents.


on demand retail customer service expert helping two men with electronic device

Recruiting experts service agents that are willing to provide an efficient while being friendly will help reduce churn in your business.


If you worry the level of service you’re providing may not be sufficient to meet the demands of today’s consumers (and you’re perhaps seeing this point illustrated in a particularly high customer churn rate or a low retention rate), the solution may be easier than you realize.

According to many experts, the trick to offering a great CX is recruiting a team of expert service agents who will represent your company in all of its customer transactions—and who will do so in a manner that’s as friendly as it is efficient.

To this end, the American Express survey found 68 percent of surveyed customers said a “pleasant representative was key” to whether they felt an experience with a company’s service team was a positive one. Almost as many, 62 percent — said the knowledge or resourcefulness of that customer care representative was the key factor.

All of this data points to the need to recruit a team of agents who aren’t just in it for the paycheck, but who are dedicated to their profession, with the expertise to serve your specific customer base in the most satisfying ways possible.

Step #3: Offer a Self-service Option.

conversation on mobile device between customer and on demand contact center chatbot solutions

With the increased usage of mobile devices, it is important to offer customers the option of a chatbot, mobile apps or website FAQs.


As important as it is to have CX agents who are knowledgeable, friendly and efficient, it’s equally important to offer your customers the chance to have their questions answered or inquiries resolved without having to deal with a live agent in the first place.

That makes sense, considering that today’s consumers are primarily mobile, more inclined to make their purchases from the comfort of their living room couch than at the local mall. To that end, they also want the service they receive to be convenient and hassle-free, which increasingly involves the use of automated chatbots, mobile apps and website FAQs, to name just a few of today’s most common self-service options.

Indeed, automated processes have become so standard that an extraordinary 88 percent of American consumers expect the companies they do business with to offer them, according to research from Statista. The American Express report underlines this data, stating more than six in 10 consumers say “their go-to channel for simple inquiries is a digital self-serve tool.”

Step #4: Implement an Effective Customer Complaint Resolution Process.

man on the phone talking to on demand contact center solutions

Customers are willing to forgive and forget if done properly.


Finally, it must be noted that, even after a negative experience, a customer is not necessarily lost forever. According to research from Glance Networks, as many as 70 percent of customers who have experienced subpar care are willing to forgive and forget—and return to do additional business with you—if they feel that their issues have been resolved.

This points to the need to implement a customer complaint resolution process that actually makes a point of resolving inquiries from dissatisfied customers as quickly and satisfactorily as possible, across all channel —be it incoming phone calls or scathing social media.

And this requires a couple of things:

  1. The use of friendly and unflappable customer care agents—the type who will remain calm even when talking to irate and sometimes unreasonable customers.
  2. Putting in place an operational strategy that not only gives complaints a priority in your queue, but also connects them with specialized agents who have the authority to immediately resolve them.

Related read: How to Create a Customer Complaint Resolution Process that Works


Reduce Customer Churn Rate with On-demand Care

As straightforward as all of these steps are, they may also be beyond the capabilities of small- or medium-sized businesses to implement in a cost-effective way. After all, recruiting a full roster of professional and skilled customer service agents—and then keeping them employed and happy all year ‘round, even during seasonal fluctuations in demand and utilization—is something with which even larger corporations struggle.

And having the technological resources to offer an efficient and reliable (read: as little downtime as possible) automated customer service option may similarly be beyond the capabilities of many companies. So is the expertise to put in place a customer complaint resolution process that actually works.

For that reason, more businesses are turning to outsourced, on-demand contact center solutions to help implement the steps it takes to reduce customer churn. And Working Solutions is a great example of this: With more than 20 years of experience helping companies across a variety of industries achieve and even surpass their CX goals, we can deliver all of the above, and then some.

Interested in learning how we can help you reduce your churn rate with world-class customer service solutions?

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