How to reduce customer churn?
Posted: Mon Jan 20, 2025 5:59 am
While some level of customer churn is inevitable, it's important to reduce it as much as possible. Here are some ways to do that.
Get fully incorporated
Customers often churn because they don’t have the patience to fully explore your product. So create a thorough onboarding process that ensures all users are comfortable with all features, especially the ones that are important to them.
Adjust them for the correct intent
Provide them with educational materials such as setup videos, demos, templates, etc.
Focus on the right customer intent
Engage the customer regularly and make sure you are providing everything they need to be successful.
**Listen to customer feedback
Ask customers what they like and what they don’t. Invest in understanding customer behavior through product analytics – and update your roadmap accordingly.
Have a risk strategy
Identify at-risk customers based on their usage, feedback, etc. Reach out to them coo email list proactively and prevent customer churn before it happens.
Refine customer objectives
Sometimes, despite your best efforts, your product may not be the best fit for the customer. This means that they were not the right customer for you to begin with. Prevent this situation with better customer segmentation and targeting.
7. Net retention rate
Net Retention Rate (NRR), also known as Net Revenue Retention, is the inverse of churn, in that it measures the percentage of users who remain with you at the end of a given period.
How to calculate NRR?
NRR = (MRR at the beginning of the period - churn - downgrades + upstages) / MRR at the beginning of the period
Let's say you have
$1200 in MRR on January 1st
$120 in January losses
$80 for users who upgrade to a free plan
$500 in users who upgrade to the AI plan
Your NRR is (1200-120-80+500) / 1200 =1.25 or 125%.
Why should you calculate the NRR?
A positive NRR is an indicator that your business is growing from existing customers. This means you are increasing revenue without incurring additional CAC.
For example, if your NRR is 125% and you earned $10,000 in revenue last year, you're likely to earn $12,500 without spending anything on acquiring new customers.
Get fully incorporated
Customers often churn because they don’t have the patience to fully explore your product. So create a thorough onboarding process that ensures all users are comfortable with all features, especially the ones that are important to them.
Adjust them for the correct intent
Provide them with educational materials such as setup videos, demos, templates, etc.
Focus on the right customer intent
Engage the customer regularly and make sure you are providing everything they need to be successful.
**Listen to customer feedback
Ask customers what they like and what they don’t. Invest in understanding customer behavior through product analytics – and update your roadmap accordingly.
Have a risk strategy
Identify at-risk customers based on their usage, feedback, etc. Reach out to them coo email list proactively and prevent customer churn before it happens.
Refine customer objectives
Sometimes, despite your best efforts, your product may not be the best fit for the customer. This means that they were not the right customer for you to begin with. Prevent this situation with better customer segmentation and targeting.
7. Net retention rate
Net Retention Rate (NRR), also known as Net Revenue Retention, is the inverse of churn, in that it measures the percentage of users who remain with you at the end of a given period.
How to calculate NRR?
NRR = (MRR at the beginning of the period - churn - downgrades + upstages) / MRR at the beginning of the period
Let's say you have
$1200 in MRR on January 1st
$120 in January losses
$80 for users who upgrade to a free plan
$500 in users who upgrade to the AI plan
Your NRR is (1200-120-80+500) / 1200 =1.25 or 125%.
Why should you calculate the NRR?
A positive NRR is an indicator that your business is growing from existing customers. This means you are increasing revenue without incurring additional CAC.
For example, if your NRR is 125% and you earned $10,000 in revenue last year, you're likely to earn $12,500 without spending anything on acquiring new customers.