How to Decrease Customer Churn Rate and Increase Sales with ClickFunnels

5 min read

It’s always great to see your business take off and be successful.

That’s the goal, after all.

And as much as you’d like to sit back and watch revenues rise, you also need to keep a close eye on how your online business is doing.

We’re talking about the ways in which you measure your success.

The right measurements can indicate how well you’ll do in the future.

It might even pinpoint certain problems that might be lurking under the surface.

Detect them early on, and you’ll be able to deal with them quickly.

Because it’s not just success you want — it’s sustained success.

So with that in mind, let’s talk about customer churn rate.

More specifically, we’ll look at what customer churn rate is, how to determine it, why it’s important, and how you can decrease it.

What is Customer Churn Rate?

You’ve probably heard the term before but never quite knew how to define churn rate.

Customer churn rate is a number that shows the percentage of recurring customers who decide not to continue buying from your business.

If the lifeblood of your company is returning customers, customer churn rate is a great way to determine how well you do in getting them to come back.

So having a low customer churn rate is the goal.

It’s especially important if you run a subscription-based business or sell a product that needs to be renewed regularly.

For example, if you offer nutritional supplements that should be bought every month, customer churn rate will show how you’re doing convincing customers to return each month.

How to Calculate Churn Rate

Calculating customer churn rate is a relatively simple process.

First, you have to decide on a certain time period. That might be 3 months, 6 months, a full year, or more.

Then you take the number of customers who left (or churned) during that time and divide it by the total number of customers. Multiply it all by 100 and you end up with a percentage that represents the churn rate.

So let’s say you acquired 5,000 customers during the first half of the year, and in that same time, 500 customers churned.

Then the equation would look like this: 500 / 5,000 = 0.1.

You would then do this: 0.1 x 100 = 10.

So your churn rate would be 10%.

From this, you can see that the lower your customer churn rate, the better you are at retaining customers.

Why Does Customer Churn Rate Matter?

Simply put, it’s easier and less expensive to get your customers to return than it is attracting new ones.

Sometimes, all it takes to retain customers might be an email or social media post.

It’s even easier when you have customers on a subscription plan of some sort.

A high churn rate may also show that you’re not growing the way you want.

Something related to the customer experience could be hampering further success.

That can be an early signal for you to look at how effective your sales funnel really is.

Why Do Customers Churn?

There are a variety of reasons a customer might not return.

They may have experienced a change in their life situation which makes them unable to continue buying from you.

They may have had a bad experience with your product or the buying process.

They may have found a better option with a competitor.

Your product may simply be more popular during a particular time of year.

Or they may have suffered from poor customer service.

Whatever the reason, finding the cause of customer churn is vital.

A Note On Revenue Churn

While the focus of this article is on customer churn, we should briefly point out revenue churn.

Revenue churn is like customer churn, only that it tracks how much recurring revenue you lose over a period of time.

So even if you have a high customer churn rate, if your highest paying customers keep coming back, your revenue churn rate won’t look quite as bad.

A poor customer churn rate should still be addressed, however.

Decreasing Customer Churn Rate

Getting a low number for your customer churn rate should be the goal. This will result in more sales for your company.

Now here are several ways you can achieve it.

1. Make a good first impression

As the saying goes, you only get one chance to make a first impression.

Make sure that first impression is a good one.

When a customer goes through your sales funnel, you want to ensure they have a smooth, pleasant experience.

If they have a good experience right off the bat, they’re more likely to keep coming back for what you’re offering.

2. Build good relationships through communication

To build a close relationship with your customers, you need to practice good communication.

You could have the greatest product in the world, but if you don’t communicate well, the customer might not stick around.

Communication helps make connections, and it should happen all the time.

From the moment they enter into your sales funnel to the initial purchase and beyond, reach out to customers.

Talk to them like you would your friends.

Use every tool at your disposal: email, social media, etc. That way, you’ll be sure to reach them.

Help them see the person and the story behind the product.

If you’ve developed a close relationship with customers, they’ll come back for more.

3. Offer more value to customers

Your online company likely has plenty of competitors.

To avoid losing customers, make sure you’re providing more value.

One way to do this is by giving upselling or downselling options to customers.

If customers feel like they’re getting more bang for their buck, they have just that much more incentive to keep purchasing your products.

Luckily, ClickFunnels makes it super easy to add an upsell or downsell step in your funnel.

Try it out, and you’ll see customers become more loyal to you.

4. Get feedback and analysis

Finally, what better way is there to get a better look at customer churn than by asking the customers themselves?

Seek feedback from your customers throughout their journey.

Find out what they like about your brand, product, funnel, and more.

Discover where you may be lacking.

Customer churn happens even in the best of circumstances, but when it does, make sure you investigate why.

Churn analysis helps you find out what went wrong and where to focus your attention.

If you can pinpoint certain areas that cause problems, you can address them head on.

This will lead to a lower customer churn and an increase in your sales.

Start Lowering Customer Churn With ClickFunnels

ClickFunnels makes it easy to keep track of your customers and collect data on them.

We also provide you with tools that can help you manage churn and subscription plans.

One of these tools is Recurly.

And for info on how to integrate Reculry with your funnel, read this easy-to-follow guide.

If you’d like to know more about how Recurly can help you, check out this blog post.

How do you get customers to keep coming back for more of your product? What’s been your biggest cause of churn? Let us know in the comments.

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Using Sales Funnels

Customer Retention: How Do You Retain Customers?

8 Proven Traffic Sources for Your Sales Funnel

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