Churn Analysis
Top 5 Proven Strategies To Prevent Churn

Churn is one of the key metrics that every company  should measure in this highly competitive business world. It’s resilient that it shouldn’t end with just measuring churn data rather dig into details, analyze in depth, use those findings and fine tune the approach for business efficiency. Churn analysis acts as an index of business well-being  and interpreting how good (or bad) the organization is marching towards in terms of customer service and revenue. The churn analysis impacts the overall customer approach and helps to fix gaps in the customer retention program.

Customer churn happens when a customer decides not to continue the use of  product or service from an organization and end their partnership. It is a critical parameter for any organization since Acquiring new customers cost 7X more than retaining an existing customer”.


Churn definition:

By definition,  Customer churn or customer attrition is the number of customers who stop using a product or service during the given period and it is calculated in percentages. These are usually measured every month or quarter to assess the customer performance.

Sensitively speaking, it is the end of relationship between you and your customer. Either they don’t find your product fit their requirement, poor customer service, found a better option, highly priced or simply they’re no longer interested in your product.  Churn rate and reasons may vary based on industry type hence understanding market dynamics is the key in reducing churn with precision.

Churn Calculation:

Customer churn or attrition can be calculated by dividing the number of customers lost to the customers acquired in a given time frame.

For example,

Let’s say in a month,

No. of customers acquired  : 100
No. of customers at the end of month: 90

Churn Rate = (No of customers lost / No of customers acquired) *100       

For the given instance,  

Churn Rate = (100-90/100) *100% = 10%

By the above example 10% is the churn rate of the company in a month. Let’s discuss how this 10% could be reduced in this blog.

Churn analysis is critical for a company. Reason?

Increase in Customer Acquisition Cost:

A company spend its majority of effort, resources and most importantly funds in driving sales and achieving the target. Customer acquisition goes through a long journey and not an overnight fantasy. The ROI of these initiatives totally depends on the how you  onboard, service your customer. Apparently, it impacts your business results and revenue forecast. Aforesaid, ‘Acquiring new customers cost 7X more than retaining a customer‘. Hence,  it’s highly crucial that we monitor the churn rate closely to make efficient use of our efforts.

Impact the recurring revenue:

A small percentage of customer churn can affect a company’s result in big time as it is not a lose of just one customer but their monthly recurring revenues as far as the predicted lifetime of the customer. You also lose the potential opportunity to cross sell and upsell to existing customer that adds to the incremental revenue. Altogether, ‘it will cost 16 times more to onboard a new customer and bring them to the same extent as the lost one’.

Let’s get going and see how we could prevent churn and avoid these pitfalls..

Strategies to reduce churn:

1. Improve Product Adoption

Monitoring the product adoption rate is one of leading mechanism to prevent churn. The more customers use your product and finds value, the more they tend to stick to your brand. Product adoption curve helps companies to understand the value they offer to the customers in achieving their business goals.

Some Key Metrics to look at product adoption are,

  • License Utilization: If they do not make of use the purchased license to the fullest, they might probably feel your product is  not being helpful and eventually stop using it.
  • Inactive User or Account: If you notice that your customers not engaging with your product for a while, that’s the key indication – you’re going to lose that customer very soon.

Take these 2 parameters seriously when servicing your customer. Make sure you remind them about your product and add value through your proactive conversation tactics.  An increase in the product adoption adds to the lifetime value of customer and well received retention programme.

2. Proactively Communicate with Customers

Customer engagement is an integral part of customer success people. Majority of the companies do follow reactive approach say addressing issues once they receive queries or complaints from customer. I would rather say, this is not adequate to sustain in this competitive world. Instead, a proactive customer engagement would enable customer success team  to address customer needs even before they think of. Proactively reaching out to customer on mentioning the places where they might be struck would create positive impact on the overall customer approach & feel valued. Make it a point that your customer should never report and repeat about an issue.

Few proactive conversations that you could initiate are,

    • Sharing of training videos for non- active users
    • Blogs related to customer’s industry
    • Product update Emails
    • An email requesting a quick call to address the challenge, if any.
    • Requesting feedback

3. Identify high-risk customers

It is quite understandable how difficult it could be for the customer success team to focus on all customers in their bucket at a given time span. Hence, it is always smart to identify and segregate the list of customers who are at ‘high risk’ of churn. The ones who are likely to cancel subscription,  been inactive needs top attention to prevent churn. These predicted pools of customer could be identified by various user engagement metrics such as,

    • Decrease in product usage
    • Low Customer Engagement
    • Low CSAT and NPS Scores
    • Market Condition
    • Low health Score
    • More of no. of support tickets

Foremost, a CSM should analyze the underlying challenge and reasons for decreasing engagement. Refocusing on customers based on these parameters would cut down the churn rate.

4. Put customer goals first:

As a Customer Success person, you will have different objectives set by your company say churn prevention, customer engagement, up-sell, cross-sell, etc., These objectives would probably occupy your day in & day out and get you lost with overwhelming action items to carry out that you almost forget your main goal i.e ‘your customer goal’

When you put your customer goals first, achieving your company’s objective would be a cake walk.  Customer opt to your product/service for achieving a specific business outcome say increasing sales, streamlining internal operations, reducing operational cost,  automation etc., When your customer goals are clearly stated, helping them achieve those using your product and service becomes much simpler. To unravel,

    • Set business goals during on-board and determine strategies to achieving.
    • Set milestones and time frame for each goal
    • Regularly conduct review meetings and gather suggestion & inputs from customers
    • Educate customers on how your product can support to achieve their goals.

5. Constant feedback and surveys:

Surveys and feedback act as an important tool to understand the customer’s sentiments towards your brand. The role of CSM doesn’t end with gathering feedback and surveys but also analyze the shortcomings, resolving them and share updates with customers on the progress. Being consistent in accomplishing these activities could help in developing increased customer delight.

Understand customer sentiments through,

  • Constant surveys like measuring CSAT rate
  • Periodical assessment of NPS
  • Feedback on how beneficial their Product or feature is.

These methods would help company to understand customers from different perspective and act as major criteria in predicting the Churn.


Having understood how critical the ‘Churn’ metric could impact business growth, it is good that you strategize the customer approach aligned with your goals. Acquiring “Big logos” is of course a win but momentous lies in retaining customers which would benefit you in long run. It is also knowable that as a growing company with increasing customer portfolio, it is complex to pay attention to detail, monitor and address each customer with the same level of personalization. That’s where a customer success software can support you in empowering your customer success team to achieve goals simpler, effective and efficient.

Get a direct assistance how we can help your business reduce churn and retain customer through splendid customer relations.


We, Cordlogue,  a team of young minded professionals aspired to support a group of community whose only objective is Customer Success. We understood retaining a customer takes more effort than closing a deal. The realization led us to the development of Cordlogue, a customer success company founded in the year 2020.



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