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The Top 4 Causes of Customer Churn and How to Address Them

The best way to stop churn is to take proactive preventative measures.

In the customer-centric economy, retaining current customers is a top priority. Not only are new customers expensive to win over, but loyal customers are more valuable in the long run. They trust your brand and are more likely to spread word-of-mouth advertising or accept an upsell. Plus, retaining a following of customers gives you a good brand image, as it shows that your company is capable of inspiring loyalty.

So, instead of always seeking new customers, focus on keeping existing customers happy and preventing churn. In order to do this, you need to communicate with your customers, listen to their feedback, and constantly be on the lookout for new ways to provide value.

Customers can churn for a variety of reasons, and it’s not always clear why they are leaving. Fortunately, there are strategies that will help you discover the causes of customer churn so that you can take steps to mitigate them.

The Most Common Causes of Customer Churn

To pinpoint why your customers may be churning, begin with data. Analyze the characteristics of customers who churn and those who don’t. By uncovering commonalities within these customer groups, you should be able to discover your company’s pain points. Then, you can address the sources of churn throughout your organization or product line. While every organization is unique, these are some of the most common reasons for customer churn:

#1: Value Isn’t Apparent

If customers are churning, it may be because they don’t see the value of your brand or product. This is especially true during onboarding. When you don’t properly support customers who are new to your product or service, they won’t learn how to use all its features. As a result, they’re likely to stop engaging because they aren’t seeing the benefits they signed up for.

To prevent this, show customers the value of their investment, beginning with onboarding and throughout the adoption phase. Establish goals and the metrics needed to measure them early on within the customer journey. Show customers how to unlock the full value of the product or service, and nurture them along the journey whenever needed. Monitor their progress and take notice if a customer is neglecting to use a key feature. This may mean they need further education or support. When new features become available, make sure current customers are aware of how these additions can provide even more value.

#2: It Takes Too Long to Get Going

Customers want a product that’s intuitive and self-explanatory. If implementation is slow, there’s a greater chance that the customer will run into roadblocks, and that sets the stage for early abandonment.

So, make sure customers experience a speedy and efficient onboarding phase. Give them support by ensuring customer success teams are only a message or phone call away. Help them establish the goals they wish to achieve with the product and aim to get them using the product independently in a reasonable timeframe. As a result, customers won’t grow impatient and will be able to start reaping the benefits of your product quickly.  

#3: Complaints Aren’t Resolved Satisfactorily

If customers have complaints that your team is not responding to, you could be alienating them and missing an opportunity to strengthen the customer relationship. No product or organization is perfect, but when customers find themselves reporting the same problems again and again or not having their complaints resolved, they’ll quickly become frustrated with your lack of responsiveness. And frustration easily grows into churn.

Give your team the ability to internally escalate problems to development teams, as well as the information they need to give out correct updates. When customers escalate an issue, respond quickly and aim to resolve the issue as soon as possible. By handling escalations in an efficient manner, you not only deal with the problem but you also demonstrate that you care about your customers. In that way, escalations can actually help you form a deeper bond with your customers. Plus, you can take the feedback gathered during escalations to make your product or workflow even better.

#4: Poor Customer Engagement

Customer engagement in the customer-centric economy should be an ongoing process. You don’t want new customers to feel lost, left behind with a new product or subscription they don’t know how to operate. And as time goes on, you don’t want to lose contact with them. In order to retain lifelong customers, you need to educate and engage them on a regular basis.

Monitor customer usage and behavior, then tailor every communication to the individual customer. Try using a customer success platform to send them automated emails if their usage falls below a certain critical threshold. Watch their frequency of use, which features they do and do not use, and check in to see how they are doing with your product. You could send customers offers or discounts to mark occasions, such as their service anniversary or birthday, to remind them that they are valued. Most of all, be sure you are continually checking in and nurturing the relationship with positive, proactive engagements.

Reduce Churn Using a Customer Success Platform

Your customers are invaluable, so it’s vital that you demonstrate why renewing with you is better than seeking out your competitors. But if you’re having trouble identifying and engaging customers who are in danger of churning, try using a customer success platform.

A customer success platform allows you to gather information from various systems into one central location, making it easy to see how a customer is engaging, or not engaging, with your team. It can also be configured to trigger automated tasks based on customer actions, ensuring that at-risk customers are flagged. That way, your team can quickly take the action needed to prevent churn. Such a platform can also automatically assign tasks to customer success teams, hold recurring account reviews, or reach out to customers who have completed the onboarding period.

In short, a quality customer success platform can help you prevent churn by making it easier to provide your customers the care and attention they require. By being attentive and proactive, you can retain and nurture current customers which is, after all, the secret to success in today’s customer-centered economy.

Totango offers a customer success platform that is designed around churn reducing best practices. It has cutting-edge capabilities that can help you meet your retention goals, enhance the customer experience, and cultivate lasting growth. Request a demo or explore Spark to learn more.

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