12 Ways to Reduce Client Attrition for Long Term Profitability

IIt hurts to be ghosted by prospective clients; it hurts even more to lose once loyal customers. In the business world, we don’t call it a breakup, though. The loss of customers over a given timeframe is known as client attrition, customer churn, customer turnover or, perhaps most harshly, customer defection. But what to do about it?

You’ve heard plenty of marketers and business owners give the same platitudes: “It’s just the slow season. Things will look up in a few months.” Or “Some tail off is inevitable, so don’t sweat it!” While, yes, often they’re true… the advice doesn’t always make you feel better, especially in the SaaS space where long-time subscribers are the lifeblood of the business.

So, consider this a guide for the ambitious entrepreneurs, the overachievers, the market leaders and enterprise brands who are ready to scale. Here’s exactly how I’d go about reducing customer attrition if I were you.

Skip to:

• What is Customer Attrition?
• The Real-World Impact of High Churn
  • Why Churn Sucks
  • The Usual Culprits of High Attrition
• Ways to Reduce Client Attrition
• Calculating Your Own Customer Attrition Rate
  • What’s a ‘Good’ Rate for Businesses?
• Conclusion: Proactive Retention Over Reactive Attrition Management

What is Customer Attrition?

To know how to reduce your customer attrition levels, you first need to understand exactly how customer attrition works on both a theoretical and practical basis. So let me walk things back a little.

Customer attrition, like I said, is simply the loss of clients/customers. Therefore, it’s a pretty bog-standard part of the customer life cycle, one that you can’t avoid 100% of the time. And, importantly, it falls into two camps:

1. Voluntary, as in a customer has intentionally chosen to cancel a subscription or stops buying from you of their own volition
2. Involuntary, which happens due to circumstances beyond the customer’s control, like health reasons or an issue at check out.

Of course, not all attrition is made equal. Losing a new albeit one-time buyer who only spent a little is not the same as being ghosted by a loyal patron who both invested in your services AND germinated your brand’s gleaming reputation via word of mouth.

It’s the latter situation, where you might feel pressed to crack out the PR, to convert the negative sentiment into something more productive. But, to be honest, you want to avoid that at all costs. Keeping these authentic brand cheerleaders on side is worth their weight in gold.

The Real-World Impact of High Churn

As you might have twigged, customer attrition is a vital indicator of business health. I mean, losing customers is intuitively bad, right?

Well, as I gestured up top, many service providers – emphasis on SaaS companies – accept it as a fact of business life. However, as a glass half full kind of person, I’m inclined to say that that’s a limiting, if not, damaging mindset to have, even if you legitimately have a massive market to tap into.

Although it’s inevitable some customers will churn, you have the power to keep that at realistic minimum; you can always improve retention levels and, thereby, shrink the attrition.

Why Churn Sucks

• When churn goes up revenue goes down, putting the viability of future scaling into question. Really, your aim is to thrive, not just survive. So, when you lose a customer, that’s missed opportunity for upselling, cross-selling and building momentum for growth.
• The ‘eggs in one basket’ effect: Simply put, fewer customers = less stability for your business. If the valuable ones jump ship, it’s going to be much harder for you to steer through the financial turmoil.
• Retention is wayyy cheaper than acquisition, since acquiring a new customer can cost anywhere from 5 to 25 times more than keeping an existing one.
• When your churn levels are at a stable minimum you free up budget for marketing. Healthy monthly recurring revenue (MRR) opens the doors to diversifying your marketing mix, from lead gen PPC to brand development.
• A large, loyal customer base markets itself and is an attractive pull for prospective customers.

The Usual Culprits of High Attrition

Consumers move on for a variety of reasons: they find cheaper alternatives, another product better meets their needs, their priorities shift, something about a service or brand lets them down, or maybe their life circumstances changed, meaning that they no longer need said product/service.

It’s your job as a business to work out which of these reasons apply to your most valuable customers – think the recurrent shoppers or big B2B contracts – and intercept these decision-makers in moments of hesitation to prove your worth. Or better still, before they lose any confidence in your brand.

Offering a discount when a subscriber heads to a cancellation page is a common example, but it’s also about the long-term foundational stuff that reinforces your brand’s reputation and relationship with its customer base. (Put a pin in that).

Here’s a non-exhaustive list of the mistakes I regularly see our newly onboarded clients make – and that I’m incredibly eager to fix:

• You’re attracting the wrong customers in the first place – i.e., your targeting is off.
• Onboarding processes could do with some refinement.
• Brand messaging is unclear, just like your USP.
• CTAs aren’t doing the heavy lifting.
• Payments won’t go through.
• Your customer support stinks (sorry).
• Your product has technical issues hampering the user experience (UX).
• Customers think your competitors can do a better job.
• There’s a brand reputation issue.
• You need to go back to the drawing board with your pricing.
• There’s too much friction for your customers using your product…
• ….Or it’s not helping them achieve their desired outcome.

12 Ways to Reduce Client Attrition

Both voluntary and involuntary customer attrition harm your business, gently chipping away at revenue that would be better spent on your content marketing, PPC or other customer on-ramps.

That means your first port of call is to craft a comprehensive customer retention plan, following your buyers or subscribers across every touchpoint. The goal? To elevate the customer experience at every turn, always meeting them where they’re at.

1. Tap into concrete data to understand why customers are dropping off: AKA go back to the source. Customer surveys, interviews, polls and reviews are a clear starting point, but don’t forget to look at the behavioural stuff too; cutting-edge website analytics software like Hotjar visualise your website visitors’ activity, unearthing stumbling blocks to conversion.
2. Return to your product for refinement and apply the essential principles of user-centred design. This ensures that your users’ needs are prioritised across every stage of the user experience and your decisions are grounded in data rather than assumptions about your audience.
3. Go back to your brand basics: Sometimes customers leave because the experience no longer matches the promise or they ‘outgrow’ your identity. Reassess your brand story – positioning, messaging, value proposition and visuals included – to ensure they’re resonant across every channel. Strong brands build trust before, during and long after the initial purchase, so make sure you do too.
4. Make sure your website is technically sound: A slow, confusing, inaccessible or feature-bloated website creates unnecessary friction. Conduct a thorough user experience audit, reviewing page speed, accessibility, mobile responsiveness, navigation, site architecture and conversion paths. You’ll be surprised at how impactful these small usability improvements become in the long haul.
5. Sure up payment routes; in other words, make them clear, provide multiple payment options and banish any pesky basket bugs preventing check out. Also, don’t neglect to consider the steps between ‘adding to basket’ and the actual purchase. The smoother, the more conversion-primed.
6. Improve your customer acquisition strategy: If your marketing attracts people who aren’t the right fit, they’ll inevitably churn. So, focus on targeting audiences whose needs genuinely align with your product – here, targeted inbound strategies like SEO are so worthwhile. Your traffic will pick up and comprise of warmer leads.
7. Invest in a thoughtful onboarding process: The first few days or weeks often determine whether a customer stays for months or disappears after a single interaction. What they say about first impressions is true! So, guide new customers towards quick wins with welcome emails, product tutorials, checklists, relevant content and personalised support.
8. Deliver exceptional customer support: Positive, authentic interactions with your customer support team are what your customers will remember most when things go sour with your product. Be responsive, personable, empathetic, and provide plenty of channels to receive a helping hand.
9. Stay on top of your reputation: You already know it: value alignment and online brand sentiment can be a killer for customer retention.
10. Rethink your pricing: Review whether your pricing reflects the benefits customers receive and consider introducing flexible plans, annual discounts or usage-based pricing if appropriate.
11. Use predictive customer attrition technology: Modern CRM platforms and AI-powered analytics can identify customers who are showing early warning signs of leaving. Declining engagement, reduced purchasing frequency or changes in product usage often appear long before cancellation – make the most of them!
12. Build retention into every stage of the customer lifecycle: Regular communication, relevant product updates, loyalty initiatives and personalised recommendations all reinforce the value of your product over time. The more embedded your product becomes in a customer’s routine, the less likely they are to leave, and the greater the lifetime value of every relationship.

Calculating Your Own Customer Attrition Rate

Typically expressed as a rate showing the number of customers lost over a particular window in time, you can use customer attrition to pinpoint where things might be going wrong, especially if you’re benchmarking against past performance or alongside specific events.

To calculate customer churn or attrition, plug in the appropriate numbers to this formula:

Customer attrition = (number of lost customers / total number of customers) x 100

If you’re not the mathsy sort, don’t worry. A decent analytics tool, such as Mixpanel or Zendesk, can automatically track churn rates for you, combining the real-time data with the predictive modelling we talked about earlier.

What’s a ‘Good’ Rate for Businesses?

There’s no universal golden rate for businesses, and understandably so; what counts as ‘good’ will depend heavily on your specific industry, customer base size and business model.

That said, these average cross-industry benchmarks are pretty illuminating…

• 3.60% = Overall churn rate
• 2.34% = Average voluntary churn rate
• 1.25% = Average involuntary churn rate

But ultimately, you should aim for something under 5-7% annually as a B2B or enterprise business, or around 1-2% monthly if you’re a SaaS brand. In my book, the lower the better.

Conclusion: Proactive Retention Over Reactive Attrition Management, Always

So, to pull all of the threads together, reducing customer attrition means anticipating it. Acting well before subscribers even consider leaving. Knowing your target audience so intimately, every time you encounter a touchpoint, you’re so attuned, to them, it feels like you’re reading their mind when, in reality, you’re just acting upon the data.

When product, customer experience, brand storytelling and marketing mix are integrated thoughtfully, service providers can deliver the convenience and emotional connection that consumers of today have come to expect. By the same token, you’ll be strides ahead of the competition – exactly where you want to be.

Eager to stay relevant and, dare I say, resonant? Then consider having a chat with the Vital crew. Our digital strategies crack conversion, yes, but they also keep customers coming back well after the fact.

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