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Why my business has a high churn rate? 5 solid reasons you need to be aware of.



Churn rate is the percentage of customers that leave your business within a given period. The higher your churn rate, the more likely you are to lose customers and revenue.


Churn rate is calculated by dividing customer cancellations by customer additions in a given period (usually one month). For example, if you have 100 customers at the beginning of January and 20 of those customers cancel during the month, your monthly churn rate would be 20%.


Churn rates vary widely based on industry. Some industries experience very high churn rates because they're not built for long-term relationships. For example, many subscription-based businesses have extremely high churn rates because their customers are always looking for better offers elsewhere. For example, if you sell subscriptions to fitness services like CrossFit or SoulCycle, it's not uncommon for 30% or more of your members to leave each year.


Churn is a natural part of business, but it should be as small as possible. High churn rates can be a sign that your customers are unhappy with your product or service or that they don’t see the value in what you’re offering.

Why does churn rate matter and why you should be aware of its performance as an indication to measure failure and success?


The reason why churn rate matters are because it tells you how your product is doing and what your users think about it.

If your churn rate is high, it means that many people are leaving your product quickly — which may signal a problem with your product or onboarding experience. If you're seeing low churn rates, then chances are good that you're doing something right!


The best way to reduce churn rate is by improving customer retention efforts and ensuring customer satisfaction through better communication and support channels.


Knowing how many customers are leaving and why they're leaving is crucial to making improvements in your business model. In fact, it can be a good indicator that something needs to change. If you have a high churn rate, it can be very difficult to turn things around. You need to identify where the problem lies and address it as soon as possible so that you don’t lose any more customers.



1. You don't have the right product offering for your target audience.


You will always have a high chunk rate if you don't have the right product offering for your target audience. You can have a product offering that is not aligned with what people want or need, and you can have a product that doesn't meet their expectations. You can also have a product that's too expensive, too cheap or simply not doing what it says on the tin.


  • The problem for most businesses is that they don't know how to do this because they haven't been able to test their assumptions about their customers' needs and wants before they launched their product.


Whatever your business is, if you don't have the right product offering for your target audience, you will have a high chunk rate.


To put it simply: A chunk rate is the percentage of customers who abandon their shopping carts before completing a purchase. It's important to keep this number as low as possible because if it's too high, you'll lose money from products that could have made sales.


So how do you know if your product offering is right?


You need to understand what your target audience wants and how they want it delivered. Then you can create an offer that meets those expectations—and makes them want to buy!



2. You're not communicating with your customers frequently enough and effectively enough.


If you're not communicating with your customers frequently enough and effectively enough, you'll have a high chunk rate. There are many reasons why this happens, but one of the most common is that you aren't giving your customers enough information.


  • Keep in mind that your customers are the lifeblood of your business. You need to be communicating with them frequently and effectively in order to keep them engaged, retain them, and turn them into loyal fans of your brand.


If you just send out emails once per quarter or once per year, then you're probably going to lose a lot of customers along the way—and more importantly, they won't be engaging with your content. That means that when it comes time for you to send out promotional emails that might convert at a higher rate (such as around Black Friday), they're not going to respond because they've forgotten who you are!


This is why having a high chunk rate isn't necessarily good—it means that your audience isn't engaged enough with your brand or product that they want updates about what's new or what's on sale. That's definitely worth working on!



3. Your customer service isn't as good as it needs to be, or at least not good enough to keep customers happy and satisfied with their experience with your company and brand.


When your customer service isn't as good as it needs to be, or at least not good enough to keep customers happy and satisfied with their experience with your company and brand, you're going to have a hard time retaining customers.


Here is an example, when customers contact you, they expect a response within a certain amount of time. If they don't hear back from you within that window of time, they're going to move on and find someone else who can help them. And when they do, they'll probably tell others about how unhelpful your company was—which means more potential customers will avoid doing business with you in the future.


  • If you want to increase the chances of retaining customers, make sure that everyone in your organisation knows how important customer service is for their success as well as yours.


A high chunk rate (or low customer satisfaction) is a sign that your company isn't meeting its customers' needs. The longer you have to wait for a response, the more frustrated you'll become and the more likely you are to take your business elsewhere. You can prevent this by increasing the number of times your customer service team is available, or by hiring more people so they can respond faster when someone has a problem or question.



4. You're not doing enough (or anything) to encourage customer loyalty after they've purchased from you once or twice, so they never feel compelled to come back again or refer others who might be interested in what you offer.


The key to customer loyalty is to provide a great experience and make the effort to engage with your customers after they've made their first purchase. This is what can help you build a strong relationship with them, which will make them feel compelled to come back, refer others who might be interested in what you offer, and ultimately become long-term customers.


  • There is a lot of data that shows that customers who feel they are being treated fairly and with respect are far more likely to come back, refer friends, and purchase additional products than those who feel they have been taken advantage of.


This is important because once a customer has purchased from you once or twice, they will not be as likely to come back again unless they feel like they were treated fairly.


By treating your customers well after they've made their first purchase from you, you will encourage them to keep coming back for more.



5. You don't have a process in place for collecting feedback from customers (and potential customers) so that you can improve upon things that aren't working well and capitalise on things that are working well.


There are many benefits to collecting customer feedback. One of the most important is that it helps you identify things that aren't working well and capitalize on things that are working well.


  • This is because when you collect feedback from customers, you can use it to improve your product or service. For example, if a customer says that they don't like something about your product or service, then you know what part of your marketing or product needs improvement.


Similarly, if a customer says that they love something about your product or service, then you know what part of your marketing or product appeals to them. This can help guide future decisions about how to market your company's products and services so as to appeal more strongly to certain types of customers.


In addition to improving upon existing processes and products/services, collecting feedback also helps companies understand what their competitors are doing right so that they can improve upon them as well!


You should pay more attention to your churn rate because it's an important metric for your business' health.

It's important to pay attention to your churn rate because it tells you how well your company is doing in retaining customers, and therefore how likely you are to succeed in the long run.


If your churn rate is high, it means that customers are leaving your service or product quickly—and if they leave, they won't be coming back. Similarly, if your customer base is growing but your churn rate remains steady or even increases, it means that new customers aren't sticking around either.


Knowing this can help you make better decisions about how to improve customer retention. For example, if you see that customers are leaving because of poor customer service or bad pricing structures, you can take steps to address those problems and keep them from happening again.