Simple Ways to Reduce Customer Churn Rate

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If currently your business or company is facing a "Churn Rate" problem, then rest assured that you are not alone. As a business or company develops, they will increasingly realize that customer engagement is very important. A strategy to turn new users into returning users so that customers feel more comfortable subscribing to our products is a solutive step in improving the user experience.

According to a report written by HubSpot's 2021 State of Inbound, more than 50% of companies worldwide consider increasing customer satisfaction levels to be the top priority in carrying out marketing strategies in 2022.

An interesting fact was revealed by Bain & Company that reducing churn rates and increasing user retention is something that must be done so that businesses can survive in market share. Their research states that a 5% increase in user retention can have an impact on increasing profits by 25% to 95%.

Knowing the fact that the churn rate holds an important key in the stability of a business, this discussion will discuss comprehensively what a churn rate is and how to overcome it. Come on, see more in the discussion below!

What Churn Rate Means?

What Churn Rate Means?

In simple terms, the Churn Rate is the percentage of customers who end using the services or products of a company during a certain period of time. Churn rate can be calculated by dividing the number of lost customers (user loss) within one quarter by the number of new customers (new users) in the same quarter.

Churn Rate is often associated with consumer behavior. Because by understanding the habits of customers when they use a product, it will be easier to prevent them from unsubscribing. In addition, Churn Rate is also known as “Customer Attrition”. Customer Attrition refers to the percentage of a certain number of customers who suddenly decide to stop subscribing to a product or service offered by a company.

In the following, an example scenario is presented so that Erzedka Friends can better understand the concept of Churn Rate. Say, for example, a company enters a new quarter with 500 new users. But on the other hand, the company also lost 25 customers (user loss). So if the number of user losses is divided by the number of new users, it will produce a Churn Rate of 5%.

What are the different types of churn rates?

In addition to studying several strategies that might be developed to reduce Churn Rate, Erzedka Friends also need to understand various types of Churn Rates. Because actually not all types of Churn have a bad impact.

1. Desired Feature

The first type of Churn Rate is when a customer decides to leave a product because the product is not what they want. Some customers may expect your brand to make a product or service that meets their needs, or the cool term is “Product Personalization”.

If a brand has a very diverse customer base, of course fulfilling all their wishes is impossible. Some customers may be disappointed when you launch a new product that is considered irrelevant to their wants and needs. Even if the new product looks good to most of your target audience.

Therefore, this type of Churn does not cause too much harm. Because if your brand launches a new product that is mature and looks suitable for almost all target audiences, then you don't have to worry about a small percentage of other customers who might switch because they think the new product doesn't suit their wishes.

2. Customer Churn

The term “Customer Churn” is of course familiar to some Erzedka Friends, right? Because this type of Churn is the most common. For those who don't know, Customer Churn is a reduction in the number of customers in a company or business in a certain period of time.

Customer Churn is a factor that greatly influences business continuity and the profit generated by a company. Therefore, when discussing the "Churn Rate", the main thing that is always underlined is about Customer Churn.

3. Revenue Churn

Revenue Churn is the reduced profit earned in a certain period of time. Or in other words, the profit or profits obtained are much smaller than the previous time period. Through the Churn Rate metric, of course Revenue Churn is something that needs more attention apart from Customer Churn. Because both Customer Churn and Revenue Churn can have a negative impact on business continuity.

When Revenue Churn occurs, a company may not lose customers. But the company's product couldn't generate much profit from the customers who bought it. Even so, Revenue Churn also has a fairly close relationship with Customer Churn. Because if the number of customers decreases, it will automatically have an impact on the amount of profit earned.

How do you reduce churn rate?

How do you reduce churn rate?

To maintain loyal users so that they remain loyal and do not switch to competitors, there are several effective strategies that Erzedka Friends can implement. Curious about this strategy? Come on, see more below!

1. Interact with Customers Through Their Feedback

One strategy to reduce the churn rate is to establish two-way communication with customers. Occasionally send email blasts to loyal users to ask for their feedback to find out the level of customer satisfaction.

By routinely carrying out two-way interactions and getting feedback from customers, customers will feel more cared for and continue to remember your brand. This feedback is also very useful in carrying out content marketing for companies or businesses.

2. Understanding the Causes of the Churn Rate

The reasons that cause customers to leave a brand can be varied and unique. Each customer may have their own reasons.

a. Price

It is undeniable that price is a determining component in running a business. If several customers find competitors with the same product but offering more economical prices, then of course customers will switch to these competitors.

b. Product Conformity

Product suitability or often referred to as "Product / Market Fit" is another reason why customers ultimately choose to leave a product. Because if customers realize that they cannot achieve their goals or required solutions using your product, then the churn rate will most likely increase.

c. UserExperience

In short, User Experience refers to how users experience when using digital products or services from your company. If the experience of these users is unsatisfactory or even problematic, then they will tend to choose to switch to using other products or services.

It is fitting for a business owner to understand the various possible factors and causes of the Churn Rate. Because this is very useful in building strategies to improve user experience and user engagement.

3. Focusing on Loyal Users

The next tip in preventing Churn Rate is to focus more on customers who have proven to be loyal. Every company, of course, stores various data from customers. This data may include the purchase transaction history of the customer.

This will be very useful for creating user segmentation. Customers who are in the "loyal" segmentation are more suitable to get various special promos and regular newsletters on products that have just been released by the company. As a result, these loyal users will feel special, so they prefer to stay subscribed and not switch to competitors.

4. Implement Marketing Funnels

Marketing Funnel is a concept to explain the stages that customers go through before finally purchasing a product. By knowing and understanding the Marketing Funnel, it will be easier for a company to identify the reasons why customers cancel purchases.

In addition, there is also the term "Digital Marketing Funnel" which refers to a combination of strategies and techniques to help businesses increase new users and reduce churn rates. The Digital Marketing Funnel, in addition to using a product purchase flow strategy by customers, also implements various types of digital marketing such as Facebook Ads and Video Marketing.

So, for Erzedka Friends who are currently in need of professional digital marketing services but at friendly prices, then don't hesitate to visit the Erzedka website. Because Erzedka provides Google Ads Indonesia services to increase your company's brand awareness and user engagement.

5. Creating a Roadmap for New Customers

It is important for company or business owners to ensure that new customers really have a good experience when purchasing a product for the first time. This is very useful so that these new customers remain comfortable with the services and products they receive.

There should be special treatment for new customers, such as providing special discounts or sending onboarding emails. Through email onboarding, business people can communicate and introduce company brands and superior products that might interest customers. By doing so, it is expected that the Churn Rate can be minimized.


In maintaining the stability of a business, of course a qualified marketing strategy is needed to attract more and more new customers. However, developing a strategy so that customers who have been obtained remain loyal to using the product is also important.

The strategy must pay attention to the Churn Rate. Churn Rate is the percentage of customers who end using the services or products of a company during a certain period of time. In simple terms, the Churn Rate is calculated from how many customers are reduced compared to new customers who come.

Churn Rate has various types, including Customer Churn, Revenue Churn, and Desired Feature. To reduce the Churn Rate, Erzedka Friends requires a specific, mature strategy. Some of these tips and strategies are interacting with customers through the feedback they provide, implementing a Marketing Funnel, focusing on loyal customers, and creating roadmaps for new customers.

Apart from that, Erzedka Friends also needs to clearly know the causes of the Churn Rate. Usually Churn Rate can occur because the product price is considered too high, the product does not meet the needs of most customers, and the user experience is less than optimal. Well, that's enough discussion this time regarding strategies to reduce the Churn Rate. Hopefully this will be useful for Erzedka Friends, OK!

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