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Reduce Churn Now: 5 Methods to Prevent Customer Churn

May 16, 2023

So, you’ve never worried that much about customer churn but then suddenly lost a major account. Or, maybe you’ve been leaking a few and it’s starting to bother you.

Either way, you’ve finally sat down to crunch the numbers and you’re now staring at your spreadsheet in disbelief.

You check again. Same answer.

What those numbers are showing you is a very real truth: customer churn costs businesses money.

In fact, our CEO Adam Dorrell reckons that, across the economy, businesses lose nearly $2 trillion every year due to churn.

And if the customers who are churning are high-value customers, one or two losses can suddenly mean your business is in nowhere near the shape you thought it was.

So, you’ve got a churn problem. What can you do about it?

We’ve been helping B2B companies retain their customers and prevent customer churn since 2007, and according to Gartner, no other provider does it better. So, if you’re a customer experience (CX) lead or B2B business owner looking for how to prevent customer churn, you’ve come to the right place.

In this article, we’ll give you our top 5 methods to get customer churn under control.

But first, let’s put our money where our mouth is. We said churn costs you — we’d like to explain why.

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Why Tackling Churn Should Start Now

While there’s no question that attracting new customers is a driver of growth, nurturing the relationships you have with your existing customers and addressing their concerns is just as vital.

Here’s why:

  • It always costs more to sell to new customers. You’re far more likely to achieve up-sell and cross-sell opportunities with customers who know your brand already. According to the Harvard Business Review, it can cost anywhere between 5 and 25 times as much to sell a product to a new customer as to an existing one.

  • An increase in customer retention equals an increase in profits. Customer retention is positively correlated with increases in profit. And the correlation is massive. According to the same research, a 5% growth in retention was linked to growth in profits of 25%-85%.

  • Satisfied existing customers spend more. The HBR found that satisfied customers who stay spend as much as 140% more than other customers. Existing customers are also more likely to buy your newest products and see you through difficult periods.

  • And finally, it’s simple math. Worse than the costs associated with customer churn, the math is simple: losing a customer before you get back what you invested to onboard them means that acquiring customers has cost you more than it’s earned you. Depressing, right?

The fact is that if your churn rate is too high, regardless of whether you’re signing on new customers, your business is leaking money long-term. Preventing churn, or at least reducing it, should therefore be a priority for every business.

Why Churn Is Killing Your Business - Part 1

The best way to do this is to develop a customer retention program. This is a set of systems, processes, and actions that you use to boost your customer retention rate. To make this work successfully, your focus should be on the why of churn from the perspective of the customer.

That means putting the voice of the customer (VoC) first.

These five methods aren’t the only ways of doing this, but they provide a solid foundation. Any one of these will tackle customer churn head-on. If they can be combined and embedded across all levels of your business’s culture, you’re on your way to major churn reduction success!

Check how INAP did it and brought churn down by 50% in just two years.

5 Methods to Keep Customer Churn Low

1. Actively Seek Customer Feedback

B2B businesses often rely on passive feedback, such as repeat contract renewals, as a sign that there’s nothing to worry about, without real conversation or engagement to really assess customer sentiment.

However, this is a surefire way to get blindsided by churn down the line. If you want to prevent churn, you need to build up a 360-degree, account-level view of your entire customer experience.

CX captures the totality of the relationship that makes customers want to stay.

It embraces the total experience a customer has when buying, using, or disposing of your product or service, including all the touch points from purchase to product usage to customer service.

It should be no surprise that customer experience is the one overarching reason why most customers churn.

And to drill down into customer experience, you have to actively seek customer feedback.

How do you get the best customer feedback? Use the right customer survey methodology.

Which Survey Type Is the Best to Maximize Feedback?

If you want accurate, plentiful feedback, you need to ensure your surveys are short, sweet, to the point and frequent.

There are multiple options to choose from: Customer Satisfaction (CSAT), Customer Effort Score (CES) and Net Promoter Score (NPS) are three of the most common customer survey types.

For B2B businesses, the best and most widely used of these survey methodologies is NPS.

Where CSAT often increases survey times and therefore abandonment rates, NPS can gauge customer sentiment quickly and vastly improve survey response rates, maximizing feedback from customers.

Not sure what we mean by Net Promoter Score? In a nutshell, NPS is a simple survey that asks customers how likely they are to recommend your product or brand on a scale of 0 to 10. But there’s a lot more to it. Check out our detailed explanation of how NPS works and our guide to some NPS best practices.

What’s more, if you use NPS surveys correctly, (using features like NPS driver questions, personalizing your surveys with cascading questions, and combining relational and transactional NPS surveys), not only will you establish an accurate headline NPS score, but you’ll also be able to unearth the drivers behind your customer experience.

This gives you a rich bank of data from which to accurately diagnose the root causes of customer churn and receive actionable insights as to how to stem it.

No other survey methodology allows for this depth of customer feedback.

We believe in the power of NPS so much that we’ve based our entire Account Experience playbook on it, because we know from both our clients and our research that it works.

  • Prevent churn by using NPS to optimize customer feedback.

2. Close the Loop on as Many Tickets as Possible

NPS is the best way to measure customer feedback, but once you’ve got the insights you need, it’s acting on them that counts.

As our Global Vice President of Education and Services, Cary T. Self, has pointed out:

Why bother having the program if you aren’t going to create change from the feedback you’re receiving?

In the research we conducted for our annual B2B NPS® & CX Benchmarks Report, The State of Account Experience, we found that closing the loop with customers gave B2B businesses an 11-point increase in their NPS scores overall and translated into an 8.5% increase in retention, for which read an 8.5% reduction in customer churn.

What’s more, research from the CustomerGauge intelligence team in 2022 discovered that businesses who closed the loop after running an NPS survey had three times the number of promoters the next time they ran the survey (compared to those who didn’t have a closed loop process).

Furthermore, companies that close the loop at every level, from frontline through to executive, decreased their churn by a minimum of 2.3% per year.

Why? As PwC found, just one bad experience can frequently be enough for even loyal customers to churn. Closing the loop quickly is the way to interrupt this progression. You can’t guarantee bad experiences won’t happen. But by aiming to always close the loop means you guarantee that you’ll always do something about them.

  • Combat churn by closing the loop with 100% of your customers as fast as possible.

3. Build a Team Committed to CX Goals

Siloing retention and churn reduction to one department or one CX team leader is another mistake that has to be corrected in order to get churn under control.

Customer experience is key to every aspect of a business. All departments, from your C-Suite to your frontline staff, need to be involved with your CX strategy, to see where each department engages with the customer and the impact each interaction has on NPS.

Talking in revenue terms (see below!) is a huge step forward to achieving this, especially when it comes to higher levels of leadership, such as your C-Suite. However, other tricks can help to embed a CX culture across your business, too.

Rewarding all departments for CX goals, such as increased customer retention, better NPS, account coverage, and closing the loop will help reinforce the value of CX and generate excitement across the board.

  • Reduce churn by embedding a culture of CX across your organization.

4. Ruthlessly Tackle Absence of Signal

One of the strongest predictors that an account will churn isn’t a flurry of angry feedback. Rather, it’s no feedback at all. We call this “absence of signal”.

What does absence of signal look like?

Think customers who you simply never hear from. They don’t respond to surveys. They don’t put in support tickets. Their account keeps ticking over, but with a total lack of engagement on their part.

If you’re using the NPS framework, these are your passives (NPS scores of 7-8).

They’re not necessarily detractors, but they’re certainly not loyal enough to be your promoters — they treat their account with indifference.

In a busy CX department, when passives don’t communicate it’s tempting not to chase feedback and assume that their customer experience is fine.

This is a mistake! If you’re serious about managing churn, don’t be complacent about absence of signal!

Put in the effort to track down accounts displaying lack of signal, and get in touch however you can. Emails, pop-ups, text messages, even a good old phone call. These accounts often hold the most valuable insight into your customer experience, so drill down until you get it.

The Account Experience podcast: Your Passives and Non-Respondents Need More Attention!

How to Tackle Absence of Signal

Keeping tabs on quiet accounts can be tricky, but it’s certainly not impossible. Again, your customer retention software tools can help here.

For example, with CustomerGauge’s Account Experience solutions, account managers can proactively track customer engagement activities (or lack thereof), thus giving them the ability to react quickly to absence of signal before it’s too late. In addition, the single view of accounts, stack-ranked by revenue, makes it easy for senior management to stay on top of high-revenue customers at risk of churning due to lack of engagement.

5. Keep Your Eye on Revenue Throughout the Whole Process

Most business leaders agree that preventing churn is a crucial business priority. But very few actually track the financial impact of their customers’ experience on their company’s bottom line.

In fact, we’ve found that over 70% of businesses don’t tie their CX data to revenue.

We call this the B2B CX Gap. And failing to close it is perhaps the biggest mistake we see B2B companies make when it comes to trying to prevent churn.

This gap means businesses have zero idea how much their CX efforts are earning them or how much they’re losing due to negative customer experience.

They risk focusing on the wrong things. It’s very common for the loudest customers to get the most attention. However, loud doesn’t necessarily equate to value. Keeping the worth of different customers in mind at all times lets you prioritize actions on the highest-value accounts first to ensure the highest net revenue retention rates possible.

What’s more, without revenue analysis, churn reduction efforts are unlikely to get buy-in outside of the CX department because it becomes harder to demonstrate their ROI.

When you let revenue drive your experience program, this also leads to more meaningful conversations at the C-Suite level.

So, how do you use revenue data to reduce churn?

Start with a few measurements:

Then, make sure your customer experience software has the capability to keep an eye on the revenue impacts of each of your customer accounts.

For example, with CustomerGauge’s Account Experience technology and powerful reporting suite you can monetize your entire account base and use that data to drive churn down and revenue growth up.

  • Tie your churn and customer experience data to revenue with Account Experience.

About the Author

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Sabrina Tessitore
Sabrina is Content Marketing Manager and qualified B2B AX-pert at CustomerGauge. She provides the strategies necessary for B2B companies to build ROI-generating NPS programs. In Sabrina's free time, you can find her seeking out new coffee shops or spending time with her Shih-Poo, Ruby.
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