7 churn management strategies to delight and retain customers

This is your guide to the most effective churn management strategies that help you delight and retain customers. Learn why these strategies are effective and how you can apply them—to bolster your churn strategy and better meet customer needs.

7 proven strategies to reduce customer churn

Customer churn is the percentage of customers who stop doing business with your brand during a certain period. Churn is a direct indication of your ability to retain or engage customers, because it’s more expensive to acquire a new customer than to upsell (convincing your current customers to buy an upgraded subscription plan or more products). 

If you’re successful at retaining customers, you’ll notice an increase in average customer lifetime value (LTV), which boosts the profitability of each individual sale you make—and sustainably grows your business. 

Remember: there’s no one-size-fits-all approach to churn reduction. Use the techniques below to inform your churn management strategy based on your unique business and customer needs, so you can consistently delight your customers. 

1. Get to the root of customer churn  

To reduce churn, you need to grasp why it’s happening as it’s happening. Taking a proactive approach helps you understand churn, because the reasons customers churn today might not be the same reasons they churn tomorrow—all of which help you better understand your customers.  

And while standard web analytics tools like Google Analytics can alert you to significant increases in churn rates, you need to dig deeper to understand why people decide to cancel their subscriptions or no longer buy from you, so you can act fast to improve the customer experience (CX). 

How to conduct a thorough analysis of customer churn

• Use tools like Google Trends to keep your finger on the pulse of patterns in customer purchasing behavior and industry trends—so you’re always one step ahead of your competitors. For example, after noticing a recent drop in searches for leather watch straps, your ecommerce company might prioritize making room for images of watches and straps—with links to your product pages—on the homepage to improve retention and guide customers to purchase. 

• Survey your customers: ask your customers why they’re leaving with exit-intent surveys; find out why users are abandoning your product with B2B churn surveys; and track short-term customer satisfaction with CSAT surveys. Then, use your voice-of-the-customer (VoC) insights to spot ways to improve customer retention. 

• Ask for customer feedback by placing feedback widgets throughout the customer’s journey on your website. Access customer insights and sentiments as they explore your website in the wild, so you can make key adjustments and reduce churn.  

• Watch recordings of user sessions on your website or web app to see exactly how users explore and engage with your design, content, and products—and spot potential areas of friction to smooth out

2. Segment your customers 

Customer churn doesn't mean that all your customers have stopped doing business with you. In fact, it may just be one customer group that’s negatively impacting your retention rate. That’s why you need to segment your customers to see which customer types churn more frequently, which of your best customers are on the brink of churning, and where you need to refocus your efforts. 

For example, after segmenting your customers by user persona and purchasing history, your SaaS start-up might notice an upsurge in churn from users with a ‘digital marketer’ persona. You then might focus on ways to retain these customers, for example, by sending them testimonials of marketers who’ve used your product to successfully achieve their goals.

How to segment your customers

• Develop your ideal customer profile (ICP) to identify your target audience or user persona based on factors like pain points, demographics, or purchasing behavior

• Segment your customers with tools like Segment that automatically extract vital customer data from a variety of sources and channels at scale, and categorize it based on your particular business needs. This ensures you’re creating an engaging experience for each customer type while getting insights into the qualities that drive retention. For example, if you notice a specific customer type is more likely to stick around after reading your blog, you might want to market your blog to users of that segment who haven't read it before to increase your chances of retaining them. 

3. Monitor user engagement 

Tracking user engagement on your site or digital product is a key retention metric to prevent churn. Understanding your users' engagement levels—and how they engage—gives you visibility into your product's potential to satisfy and retain customers. 

Engaging your customers can involve anything from regularly communicating with them through product-led content, like videos or newsletters, to creating a dynamic product experience (PX) through interactive elements and intuitive website design. 

Ways to monitor user engagement on your website or digital product

• Track key user engagement metrics with tools like Google Analytics to become aware of significant spikes or dips in customer engagement levels, so you can examine what’s causing them. Important metrics to monitor include: 

  • Time on page 

  • Average session duration 

  • Pages per session 

  • Bounce rate

  • Exit rate 

  • Customer lifetime value (LTV)

• Watch recordings of user sessions to understand how your customers engage with critical elements like call-to-action (CTA) buttons, or where they get stuck or distracted along the way. For example, after noticing a high bounce rate on your landing page, your team might discover your product demo doesn’t load fast enough to retain user attention, so they can take steps to optimize it. 

• Observe heatmaps of user activity and access key engagement metrics like clicks and scroll depth. Then, use your insights to determine if you’re creating an immersive experience and where you could improve.

4. Create an intuitive user onboarding process

How you introduce users to your product sets a precedent for all future customer engagement with it. An intuitive user onboarding process educates users on how to properly use your solution and the features that'll help them complete their jobs to be done (JTBD). 

Creating a roadmap and resources for new customers helps them successfully solve their problems with your product, so you get more users to reach their ‘aha moment’, which reduces their chances of churning. 

How to create an intuitive onboarding process and improve customer retention

• Embrace self-service resources and cater to a wide range of customer types, product use cases, and needs. Resources like product guides, FAQ pages, community forums, learning centers, and knowledge bases inspire users to learn more about your product and reduce their time to value. 

• Customize user onboarding by tailoring your content to fit the needs of each user type. For example, after clicking on your sleeping app, your SaaS business might ask customers to select the type of sleeper they are or how many hours they get each night to make the onboarding experience more relevant and engaging. 

• Add interactive elements, like tooltips, pro tips, banners, and progress bars, throughout onboarding to highlight any important features or buttons and keep customers on track

• Ask for feedback and place unobtrusive Hotjar Feedback widgets during onboarding to ask your customers what makes sense in your process, and what doesn’t, so you can optimize it without having to guess

5. Offer personalized and proactive customer communication 

Reaching out to your customers with personalized messaging, before they need you, helps show them you’re invested in their experience and needs, boosting customer loyalty—especially since 71% of customers now expect a personalized experience. 

Communicating product updates with your customers and sparking their interest with value-driven content lets you retain more customers and turn them into brand champions. 

How to engage in personalized and proactive communication with your customers

• Use AI personalization tools like Yieldify or Google Optimize to send targeted, personalized outreach based on customer segments or touchpoints. Hotjar's integration with Google Optimize lets you run A/B tests on key pages for granular insights into your user segments and personalization efforts.

• Analyze heatmaps of your pages or variants to see which personalized elements compel customers to click and engage

• Send personalized emails based on customer purchasing history or previous interactions to keep customers interested in your brand and product offering. For example, after a user signs up for your SaaS product, you might send a personalized message to entice them to check out other features, increasing product adoption, customer engagement, and retention. 

• Provide chatbots or live chat on your website to engage customers who need quick answers to their questions, so they don’t look elsewhere or churn

6. Reward customer loyalty 

One of the best ways to prevent churn is to show your customers how much they mean to you. Since competition runs steep and customer loyalty doesn’t come easy these days, make sure you reward your customers with creative incentives that inspire, engage, and retain them. 

 How to reward customer loyalty and prevent churn 

• Create a loyalty program that rewards customers based on a point system or completed steps. Once they’ve reached a specific target, send them a free sample or branded merchandise to increase customer delight. 

• Offer a referral reward or bonus to loyal customers who recommend your brand or product. This is a great example of striking a sustainable balance between acquiring new customers and reducing churn.

• Send early product access, discounts, and promotions in personalized emails to your customers and inspire them to return to your website and product pages. For example, on their one-year anniversary, you might send customers a discount code to apply at their next checkout to show your gratitude. This gives customers a reason to make another purchase, and stay loyal to your company. 

7. Follow up with customers 

Your customers are your most valuable resource—and you need to make sure you’re keeping them happy to prevent churn. That’s why it’s crucial to follow up with customers about their experience and identify ways to improve it.

Ways to follow up with customers and build lasting relationships

• Ask customers for post-purchase feedback by having them rate their overall experience and provide a reason for their score to get qualitative and quantitative insights that help you reduce churn

• Administer timed surveys like product-market fit and NPS surveys to gauge long-term customer satisfaction. Determine whether customers are likely to keep using your product in the future, and their likelihood of recommending your product or service to friends, family, and colleagues.

Reduce customer churn with user-backed insights 

The customer experience you provide and your ability to engage customers—with intuitive onboarding, loyalty programs, and personalized communication and content—greatly impact a customer’s desire to churn. 

Use the churn management strategies above to get to the bottom of why your customers churn, find out if you’re really meeting their needs, and how to prioritize product changes to better retain and delight them.