Hello again to everyone, we met in my previous article where I discussed your goals and their importance for your company.

In this article, I will talk to you about the concepts of customer churn, how it is calculated, and some tips on how to prevent customer losses.

No matter how hard you try to acquire customers, do you think your company is not growing as you want, or worse, your income is decreasing? The fundamental problem you need to address here is your “customers.”

Your customers may consist of profiles that leave you after the first purchase, meaning they are not turning into loyal customers. Customer losses and the inability to create loyal customers negatively impact your business performance, hinder business growth, deplete budgets, and undermine both your company’s and employees’ morale. Therefore, you should not ignore the customers who have left.

Customer Churn Rate:

A crucial part of managing a business is understanding the value of your customers. This is even more important in the digital age, where attracting your customers’ attention is easier than ever.

Simply put, lost customers are the number of people who stop doing business with you in a specific period. In this context, loss is a measurable change rate that occurs over a certain period.

To calculate the customer churn rate:

Choose a time interval (usually monthly) to calculate your customer churn rate. Then divide the number of lost customers by the total number of customers you had at the beginning of the period.

Customer Churn = [Number of lost customers / Total number of customers at the beginning of the period] x 100

For example, let’s say you had 2,500 customers at the beginning of the month, and during that month, 50 people canceled their subscriptions. Your customer churn rate would be 2% [(50/2500)*100].

You may have questions about why you should calculate all of this and why it is necessary.

So, Why Should You Care About Customer Churn Rate?

For companies, the churn rate is one of the most critical business metrics. For instance, a high churn rate or a consistently increasing churn rate over time can harm a company’s profitability and limit its growth potential. Therefore, the ability to predict the churn rate is crucial for the success of the company.

How Can You Prevent Customer Loss?

Now that you know how to calculate loss and why it’s important, the only thing left is to find out what to do about it. Whether you have a high churn rate or your churn rate is at a good level and you want to keep it that way, here are some ways to prevent your customers from leaving:

1. Find Out Why Customers Are Leaving

The first step in retaining customers is to understand why they are leaving. And the easiest way to do this is simply to ask!

2. Be Proactive

If your first interaction with a customer is when they cancel, you have a chance to prevent your customer from experiencing downtime by intervening earlier. Since minimizing losses is crucial for the growth of your business, try to prevent them before they happen.

3. Provide an Amazing Customer Experience

Have you ever had a customer support experience so terrible that it made you completely stop doing business with a brand?

You’re not alone.

A survey found that nearly 20% of Americans walked away from a beloved brand after just one bad experience. This number almost triples to 59% after a few bad experiences.

If you want to reduce customer loss, do everything in your power to provide a great experience when your customers interact with your brand.

As you can see, the measures mentioned here aim to prevent customer losses, but you’ll notice that they all rely on the same fundamental concept: establishing a strong and healthy relationship between the business and the customer.

In today’s technological world, it is challenging to sustain many processes such as tracking every customer’s information, quickly preparing documents, and generating reports without using specialized software. For this, you need a considerable amount of manpower and time. In short, at this level, you need a CRM solution that will help your business reduce customer loss.

How Can Your CRM Solution Help Reduce Customer Loss?

CRM software helps businesses organize their customer databases, collect data from multiple sources, and standardize communication with target audiences. All these features help you monitor customer experience before and after sales, provide better customer satisfaction levels, and reduce customer losses.

In my next article, I will be back with more detailed content on how your CRM solution can help you reduce your customer churn rates 😊