How To Reduce Your Churn Rate in 5 Proven Ways

Constantin Gutic

How To Reduce Your Churn Rate in 5 Proven Ways

When it comes to digital marketing campaigns’ performance, numerous metrics should be considered to measure a company’s development and draw relevant conclusions that help make decisions.

These metrics determine the most vital points of a business, cast light on any threats or opportunities, and unveil the source of problems that may hinder progress. By identifying key areas of improvement, measures can be taken to diagnose and ultimately solve any issues, or otherwise to ride the opportunity wave. In this way, businesses can flourish and grow.

Throughout this blog post, we cover one key metric that can single-handedly showcase whether a business is growing or struggling – the churn rate. Dive in and explore what churn rate is, how it can affect businesses and various ways in which you can reduce it.

What is Churn Rate?

The churn rate is the rate at which customers stop doing business with an entity, often expressed as the percentage of customers discontinuing their subscription from services within a specific time.

Painful as it is, all businesses, regardless of how successful they are, suffer from customer churn. Naturally, this rate is significant for any industry heavily reliant on customers engaging in a recurring subscription.

The effects of a high churn rate directly impede the growth of a business.

On the contrary, there is the growth rate, which measures the acquisition of new customers. By comparing these two rates, managers can determine if the company has achieved growth or experienced a loss. Ultimately, they are able to draw conclusions needed for a well-informed decision. And this is as simple as it can be – if the churn is more significant, then the company has lost clients, while if the growth rate is more prominent, then the company has achieved growth.

Nonetheless, to better understand the subject matter, we must dive deeper and look at churn rate types.

Types of Email Churn Rate

There are two ways in which subscribers can churn:

  1. Voluntary churn, also known as transparent churn, is when subscribers decide they are better off without emails from a company and unsubscribe or even mark emails as spam. It also includes hard bounces when somebody uses a non-existent email.
  2. Involuntary churn, sometimes called opaque churn, is when subscribers are not interested in emails and don’t open them, or when emails are directed straight to customers’ spam folder. Unlike transparent churn, there remains a possibility to make users active again by running re-engagement campaigns.

How To Reduce the Churn Rate

Analyze the reason for the churn

To figure out the solutions, we must understand the root cause of the problem and why formally loyal customers abandon ship. Although the main reasons are covered in this article, these can vary from company to company.

The first common reason might be that you attract the wrong type of customer, or customers show a lack of interest in interacting with your brand. You might have improper customer support, which creates confusion and frustration. Another valid reason could be that users are being swept away from under your nose by competition. Otherwise, it may simply be because subscribers don’t see the value of interacting with your brand anymore. Whatever the reason, for your case, you have to establish that first before taking action.

Putting yourself into your customers’ perspectives can help you understand the reasons behind their actions and behavior. Let’s take a closer look at the standpoint of both senders and subscribers:


Now that we’ve covered what churn rate is and its potential causes, how do you reduce customer churn?

1. Make a great first impression

First impression matters. In industries where competition is fierce, customers are presented with an abundance of options to choose from. Therefore, the first impression can be the tipping point for the entire customer life cycle and can be a make-or-break opportunity to gain loyalty. To leverage the anchoring effect and retain customers, you must go the extra mile and blow them away right from the first moment they encounter your business.

2. Define your most valuable customers

This advice might seem discriminatory; however, it also is beneficial.

Not all customers you have will interact or be as engaged with your brand as you wish them to be, despite your marketing efforts. A core group of consumers exists for each business, who are always engaged and open to communication. These are the most valuable subscribers that you have.

Consistently exceeding their expectations and keeping them happy is critical since they bring in extra revenue and potentially advocate your brand. All you have to do is identify them based on careful analysis of their history of interactions with your brand.

3. Engage with your subscriber base

To motivate customers to interact and engage with your brand, you must give them valid reasons to do so. The ideal situation would be delivering value to your audience – offering something that makes them excited and interested when they receive an email. You can make this happen by sending relevant, targeted, and personalized content. You have all tools at hand to carry this out effectively in Eloqua.

Needless to say, testing is crucial to see what works best for your customer pool to maximize engagement.

4. Offer incentives

Another great way to ensure that your churn rate stays well below your growth rate is to offer incentives. In other words, give your subscribers an extra boost by showing them the benefits of keeping in contact with your brand. This seems to be one of the most effective churn-reducing tactics.

However, you have to be sure that you are offering something valuable, considering your retention program’s costs and payoffs. In this way, you can ensure that you don’t lose money by spending it on customers who might be unwilling to interact with your brand.

5. Hear out your customers’ complaints

Carefully listening to complaints is an essential part of improving the services or products offered to your customers. In most cases, complaints can help you trace an existing problem that hinders the perceived quality of products and services from your customers’ perspective.

Nonetheless, 96% of unhappy customers don’t complain. So, your job is to encourage them to share their opinion on your services to resolve issues and minimize unhappiness as much as possible before it’s too late.

We regularly assist our clients in better understanding their customers’ reason behind churning away from email newsletter subscriptions by means of an innovative Eloqua reporting solutionthe Unsubscribe Reason Report.

The dashboard’s functionality goes beyond standard reporting solutions provided in Eloqua, as it analyses free-text fields where users complete their motive behind unsubscribing to campaigns. You can read more about this, and other custom Eloqua analytics solutions in our Customer Case Study.

Final thoughts

With that being said, we hope you now have a clearer understanding of what customer churn is, what potential causes and effects on a business are, and several paths you may take to reduce it. With this knowledge, you can improve the way your customers interact with your brand, thus enabling you to take the necessary steps to ensure lasting and sustainable business growth.

To further explore the extent of our MarTech reporting & analytics proficiency, we invite you to check out a complimentary demo of our expertise and retrieve your own custom LogDMS Enhanced Email Deliverability Report, containing precise action items for further improving your Eloqua campaign performance. Grounded in accurately-processed data on prior email campaigns sent out to multiple audiences, in different time zones, at various time of the day, the report can help you fine-tune settings in the scope of significantly improving email deliverability across the world.

Constantin Gutic

Developing automation strategies that will streamline processes and eliminate the human factor out of repetitive tasks, saving time and money.

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