How Can I use Customer Experience to Prevent Churn?

Recurring revenue is necessary for every business to survive and grow. Customer experience drives recurring revenue. When you reach a position where you start getting recurring revenue, be it monthly or annually, it becomes easier to manage your business expenses, plan budgets, and make more investments to grow your business. 

Where does this revenue come from? From your regular and loyal customers. And when do customers become loyal? When you provide them with a customer experience that is good enough to prompt them to make repurchases and keep doing business with you. On the contrary, if you fail to provide a satisfying customer experience, the customers churn.  

Customer churn is one of the biggest threats to the recurring revenue and regular income of any business. In this article, we will learn about:

  • Customer churn
  • Customer experience and how it is important
  • How you can use customer experience to prevent churn

Let’s start with Customer Experience and its importance.

What is Customer Experience?

Customer experience is essentially everything related to the business which the customers go through and based on which they make perceptions about your brand. It includes every aspect that the customers go through, including: 

  • Products
  • Services
  • Interactions
  • Issue resolution
  • Any other element related to the business

Let’s learn why it is essential to provide a great experience to the customers.

Importance of Customer Experience

A good customer experience is vital to attract more revenue and profits. For a couple of decades, the value of customer experience has grown, and now it has surpassed even factors like price and product. In fact, most customers are willing to pay even more for a better customer experience. 

Benefits of Improving Customer Experience

It improves customer satisfaction

No business can survive without customer satisfaction. When you provide a great customer experience, it increases the satisfaction of your customers, which ultimately benefits your business.

It encourages customers to make repurchases

When you satisfy your customers with the experience you provide, it encourages them to make repurchases from your brand. When the customers get memorable experiences, they approach you again to allow you to continue to serve them.

It attracts new customers

A great customer experience not only prompts your customers to make repurchases but also attracts more customers. Happy customers usually share their experiences with others. 72% of customers share their positive experiences with six other people, eventually encouraging them to try that brand.

It gives a competitive advantage

In today's competitive market, providing an outstanding customer experience is necessary. 89% of companies mainly compete on quality service and experience. If you fail to deliver a good CX, it would be hard to survive. Whereas, if your customers become happy with the experience you provide, they will choose you over your competitors time and time again.

It boosts brand image

A great customer experience encourages customers to talk about your business. This creates a good brand image in the market and increases your goodwill.

It improves customer retention and prevents churn

Poor Customer Experience is one of the biggest causes of customer churn. Customers are quick to switch to a competitor brand following a poor customer experience.

What is Customer Churn?

Customer churn, also called customer turnover and customer attrition is a phenomenon in which customers of a particular brand or organization stop doing business with it or simply say, stop buying products and services from that brand.

In other words, it is the percentage of customers that stopped buying products and services from a business in a specific interval of time. Calculate customer churn rate by dividing the number of customers lost in a particular period, say one year, by the number of total customers at the beginning of the year.

Customer churn rate = Customers Lost/Number of Customers at the beginning of the year x 100

So, if you had 300 customers at the beginning of the year, and out of which 27 customers have left, your Customer churn rate would be:

27/300 x 100 = 9%

Customer churn is a big problem for many businesses which they can’t afford to ignore. The main reason is its adverse effect on an organization's financial matters. Attrition of every customer reduces the recurring revenue of the business.

But why do customers churn? Customer Churn can occur due to both voluntary and involuntary reasons.
  • Voluntary churn is when customers deliberately stop doing business due to dissatisfaction with the experience and switch to other brands.
  • Involuntary churn is when a customers’ usage of the product or service ends, and they do not make a repurchase due to less usage, or when the purpose of that service is completed, or the validity of that service expires, and then customers don’t resubscribe or repurchase its membership.

To reduce involuntary churn, you can send alerts and reminders when a subscription is going to end or contact the customer to guide them about similar services. But with voluntary churn, the only way is to find out where things went wrong and improve customer experience by resolving their issues and taking action on their feedback.

As already discussed, customer churn is not good for any business in financial terms. Moreover, bringing new customers into a business is also challenging and more costly. Studies suggest that it is almost five times more expensive for companies than retaining an existing customer. So why not retain your existing customers by providing them with an excellent customer experience!

Let’s learn how to use and improve customer experience to prevent customer churn.

How to use Customer Experience to Prevent Churn

How to use Customer Experience to Prevent Churn

  1. Create Simplified Processes
  2. Provide Excellent Customer Service
  3. Provide an Omnichannel Experience
  4. Collect Customer Feedback to Gauge Customer Experience
  5. Take Timely Actions on Customer Feedback
  6. Analyze Churn When it Happens and make Improvements

Let’s learn more about these strategies to use Customer Experience to prevent churn.

Create Simplified Processes

Creating simplified processes is a great way to establish a smooth and comfortable customer experience. Imagine you want to make an online purchase urgently, but what if the process of making the payment is very cumbersome and time-consuming? Online shopping platforms exist to make consumers' lives easier by enabling them to buy products in their comfort. But a complicated and time-consuming process will defeat the entire purpose of shopping online.

Similarly, when customers don’t feel the ease of doing business with you, it creates a bad experience, and they look to switch to other brands that deal in better and easier ways. So make your customers’ experiences better by developing easy and simple processes for them.  

Whether it is researching for a suitable product or service, onboarding, purchasing, bill payment, ticket raising, problem resolution, availing any warranty, or anything; ensure that your customers don’t have a hard time dealing with your business and getting things done, otherwise it will become even harder for you to retain them.

Provide Excellent Customer Service

Customer service is one of the most significant aspects that affect customer satisfaction and their overall experience with your business. Ineffective customer service is frustrating and creates poor customer experiences. This poor service experience is enough to be a reason for customer churn. Therefore, it is essential to provide excellent customer service to boost their experience and avoid churn.

Remember that the prominent part of the customer journey starts when the customers have bought your products and services. Ensure good after-sales services, smooth complaint resolution process, and train your customer service reps well. Empower them to take small financial decisions to improve the customer experience and deliver exceptional customer service. Excellent customer service provides you an edge over your competitors and helps to avoid customer churn.

Provide an Omnichannel Experience

In today’s competitive environment, it is necessary to provide an omnichannel experience to your customers. Being omnipresent means being available across multiple channels where the customers can contact you. Be available for the customers on channels like:

  • Email
  • Phone calls
  • Social media
  • Customer service centers
  • Your business locations

Whether it is raising requests, complaints, or issues, purchasing products, buying memberships, making payments, or any other touchpoint, make sure that you are available on maximum channels so that the customers can reach you through the medium of their own choice.  

  • Allow customers to make purchases from your store, website, apps, and social media links. 
  • Accept payments through cash, credit cards, debit cards, account transfers, online payment platforms like Paytm, GooglePay, etc.
  • Allow your customers to contact you through phone calls, chat, emails, and social media.
  • Collect Customer Feedback through different channels like email, SMS, website, QR codes, and survey kiosks.

The omnichannel approach will help you retain customers with different choices of channels. Not doing this can cause customers to look for other brands that allow them to reach them through the platform of their choice.

Collect Customer Feedback to Gauge Customer Experience

Even if you do everything to improve customer experience to prevent churn, to ensure that you are taking the right steps, customer feedback is the only way. It is crucial information about how customers feel about their experience with your products, services, and organization. To gauge customer experience and measure customer satisfaction, develop a proper feedback mechanism to know and improve customer experience.

Create and send a customer satisfaction survey to know how satisfied are your customers with the experience you provide them and the steps you take to improve their experience. Customer feedback will guide you to make the right business decisions and take the correct steps to satisfy the customers.  

Take Timely Actions on Customer Feedback

Customer feedback is necessary to collect, but it is of no use if you don’t take timely action on the feedback received. Approaching customers for feedback and not doing anything about their concerns makes their experience even worse. Customers share valuable feedback information as they hope that you will listen to the voice of the customers and take the proper steps to improve their experience, but not doing this breaks their hopes.

Take action on their feedback and do your best to improve their experience and win them back to avoid churn:

  • Thank your happy customers for appreciating your efforts and giving you a chance to serve them.
  • Apologize to your dissatisfied customers for their bad experience and ask them politely where the things went wrong and what you can do to improve their experience.

Moreover, it is crucial that you take the actions at the right time before it gets too late and your customers have already switched to your competitors. Use software to collect and manage feedback and take actions in real-time to close the feedback loop effectively. Make sure that the tool you use provides you with real-time alerts and notifications of feedback or negative ratings so that you can take action before it's too late.

Analyze Churn When it Happens and Make Improvements

It is always a good idea to predict churn and take the necessary steps to win your customers back rather than regretting it afterward. But if the churn still happens, don’t just regret it. Instead, analyze the churn and use the data to take the right steps to prevent such situations in the future with any other customers.

Collect customer data and analyze the situations when maximum churn happens. Is it after a month of using your products or services, a quarter, or six months? Analyze trends of the churning customers and predict the signs of upcoming churn for your existing customers. Engage with your customers to know what’s going on in their minds. Take regular feedback from time to time, and take action on it at the right time.


Customer churn is a challenge for every business, and it affects the businesses adversely in financial terms by reducing recurring revenue. You cannot eliminate customer churn. However, you can minimize it by taking the right steps to improve the customer experience. To improve CX and avoid churn, you should ensure simple processes for your customers, provide them with excellent service and be omnipresent for them. 

You must also collect customer feedback and take timely actions to avoid churn. Still, if churn happens, use the customer churn data and experience to make the right strategies for the future to provide a great customer experience and prevent further churn.

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