8 Ways to Reduce Churn and Build Customer Loyalty

Wondering how you can reduce churn and improve customer loyalty?

Whether you’re a freelancer, a small business, a charity, or a large company, you’re always looking for ways to generate more income. This means you’ll need more leads, referrals, and customers.

Growth, however, is bigger than customer acquisition. To grow, you have to retain your existing customers. Your revenue will stay stagnant if your customers churn as fast as you acquire new ones.

In fact, if you have a high customer acquisition cost, new customers could cost you money if your existing ones don’t stay with you.

In this article, we’ll share the steps you’ll need to take to reduce customer churn and earn loyalty from your customers.

What Is Customer Churn?

Churn is the number of customers who stopped using your service or buying your products in a given period, measured as a percentage. You can determine your churn by dividing the number of customers you lost by your total customers over a certain timeframe, including a month, a quarter, and a year.

Sometimes, it’s more useful to calculate churn based on lost revenue. This is useful if your customers spend vastly different amounts. If one customer spends $10/month and another spends $500/month, the latter is more impactful to your business. To calculate revenue churn, you’ll need to divide your lost revenue by your total revenue in a given period.

Churn is a critical variable for your income. You can substantially boost your revenue by reducing churn by just one percent.

How you define when a customer churns will depend on how you deliver products and services. For example, a SaaS company would consider a customer churned once they cancel their service. An eCommerce brand might consider a customer churned if they fail to make a purchase every 90 days. At the same time, a web design agency might define churn as the moment a customer purchases services from one of its competitors.

How to Reduce Churn

Churn is a systemic problem and you’ll need to put some effort into reducing it for your online business to thrive.

Let’s take a look at a few steps you can take to minimize customer churn and keep your customers coming back.

1. Determine Why Your Customers Churn

Your first step is to uncover why your customers leave. This is a step that requires you to be proactive. Simply waiting for complaints to roll in isn’t going to help you discover the root of the cause.

You can learn about your churned customers by sending them an optional survey that requests their feedback using your email marketing tool.

You can also ask your current and former customers for reviews through your social media platforms or add a survey to your homepage.

Several WordPress plugins and solutions are available to help you add polls, surveys, and forms to your site without using code. We recommend using WPForms because not only is it already helping over 6,000,000 users add contact forms, surveys, polls, and more to their sites to generate leads, but it’s also the most user-friendly contact form builder on the market.

Another great way to collect information from new customers is to require it during checkout. WP Simple Pay, the #1 Stripe payments plugin for WordPress, allows you to customize the fields on your payment forms by adding checkboxes, dropdowns, and text fields.

The data you collect will reduce churn because you can ask specific questions regarding feedback you’ve received to help improve your products or services.

If your former customers have expressed complaints in their responses to your surveys, you can also use this as an opportunity to enhance loyalty by simply fixing those problems.

Dissatisfied customers whose complaints or requests you have addressed are far more likely to come back. In fact, they oftentimes become stronger advocates for your brand than customers who have never had a problem in the first place.

2. Define the Value You Provide

Your customers expect to receive some kind of value from your products or services. If they don’t receive that value, no amount of promising or clever selling will get them to keep paying.

Consider how your products and services are improving your customers’ lives. In other words, in what way do you create a positive change for them? Giving thought to this question will help you build and optimize products and services that satisfy your customers.

Once you know your value, target potential customers who are in the best position to realize that value. Yes, you want to sell to everyone who will input their credit card details, but poor-fit customers are guaranteed to churn. Focusing on the right customers for your business who will stay with you for a long time is more profitable.

3. Map an Onboarding Sequence

Onboarding is the process of guiding your customers to the moment of first value delivery. It’s how you walk your customers down a path to the point where they realize the actual value of whatever you sell. If they don’t experience value quickly, you’ll surely lead them straight to becoming a churned customer.

If you know the value you provide, ask yourself what it takes to get the customer to that point, then design a sequence that gets them there quickly.

For example, let’s say you run a coaching service that helps entrepreneurs automate their tedious tasks. Even though there are many things you want to teach your customers about automation so they can automate their work, it would be best to help them set up a few automations right away so they feel like they get quick value from your service.

4. Identify and Approach At-Risk Customers

Once you have a general idea of why customers churn, you should be able to identify the ones that are likely to churn at a given time.

For instance, let’s say you collect charitable donations through your site. You know that donors who turn off their recurring subscriptions are highly likely to churn and never make another donation again. In this case, you should reach out to your donors as soon as they cancel their subscriptions to find out if you can do anything to keep them engaged with your cause.

5. Offer Subscription Payment Options

Every time your customers have to pay manually to continue their service or receive a product you sell regularly is a chance for them to churn. If you sell a recurring service or offer products repeatedly, you can reduce their temptation to churn by enticing them to make a larger commitment by signing up for recurring payments.

With WP Simple Pay, you can easily create subscription payment forms that charge your customers automatically weekly, monthly, or yearly. The plugin makes adding different pricing options and payment frequencies directly in the form builder easy. It also comes bundled with pre-built payment form templates for subscriptions, allowing you to charge an additional setup fee upon activation.

It’s also a good idea to offer a free trial to entice new subscribers to commit to the recurring payment plan.

6. Give Your Customers The Right Tools

Imagine this scenario: A customer has trouble using your product but is too late to call your support number. They could email, but you won’t get back to them until the next day. They check your site, but you don’t have any information that will help.

What do they do? Some will cancel right away or vow never to make another purchase from you. Others might not churn right away, but now there’s a bit of doubt in their mind. One more unpleasant experience, and they’re likely to cancel.

You can reduce churn by creating tools for your customers to help them get their value from your products and services. You might…

• Add a knowledge center with resources and documentation on your site
• Add a FAQ element to your site
• Offer Online Assembly instructions
• Grow a Facebook community for customers to help one another
• Create a blog with helpful tutorials

Tools like these allow customers to enjoy smooth, uninterrupted experiences rather than seek other solutions.

7. Offer Discounts

Using discounts to encourage customers to stick with you is always there as an option. However, on the one hand, people like free stuff, especially if your deal makes you more affordable than your competitors. On the other hand, it’s easy to condition people to expect a deal from you every time they make a purchase.

With all of that being said, sometimes it’s the only way to get people to stay. Maybe they didn’t feel the value was worth the money before, but the discount brings the price in range. Maybe you lack a feature, tool, or product they need, and the discount will hold them over until you can release it.

WP Simple Pay is the easiest way to offer customers a discount. You can use it to create discount codes directly from the WordPress admin dashboard as you create your payment form.

Here’s an example of a coupon code field that has been added to a WP Simple Pay payment form.

8. Create a Customer Loyalty Program

Creating a customer loyalty program is a great way to reduce churn and keep your customers coming back.

You can make your loyalty program as simple or in-depth as possible. To help you get started, we’ve created a step-by-step guide on starting your customer loyalty program.

Going Forward

In some cases, customers churn accidentally due to failed payments and past-due invoices. Keeping up with these can be challenging. See our detailed guide for more information on the best way to resolve failed recurring payments.

That’s it! We hope this article has provided you with valuable tips to help reduce churn and improve customer loyalty.

If you liked this article, you might also want to check out our guide on how to create your own membership site in WordPress.

What are you waiting for? Get started with WP Simple Pay today!

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