what is customer churn and what causes it? - spyglaz

Customer churn

When customers stop doing business with your company, this can be described as customer churn. In more technical terms, customer churn is the net measure of the number of customers you’ve lost over a defined period of time. For example, if your business had 100 customers at the beginning of the month, then finished the month with 96 customers, your customer churn is 4. The churn rate would be 4 percent. The most common causes of this phenomenon are poor service, uncompetitive pricing, better promotions/offers from competitors, and seasonality.

Poor service

Clearly, poor customer service can significantly increase churn. According to a study conducted by Oracle, roughly 9 in 10 customers have abandoned a business due to a poor experience. So, if you don’t make excellent customer service a priority in your business, then it’s going to not only cost you customers but money as well. Since the same study found that 86 percent of customers were willing to pay much more for a product or service if it guaranteed a better experience, it’s obvious that great customer service can be a huge win for your business.

Uncompetitive Pricing

Most customers are not afraid to do business elsewhere if they find the price that’s just right. The most effective way to maintain a competitive edge is to develop a pricing strategy that clearly communicates your dedication to being a leader in today’s markets. By keeping your pricing and overall proposition in touch with the competition, you’ll have the best chance of reducing churn and keeping existing customers.

Better Promotions / Offers From Competitors

From time to time, your competition will release a promotion or specific offer that attracts many of your own existing customers. In today’s market, most customers need a good reason to continue doing business with you or they’ll go elsewhere. A regular range of promotions can often be the right ingredients to keep your customers stimulated and stay with you longer..


The latest research indicates that customers start churning 274 percent faster after the holidays as compared to other parts of the year. As a result, it’s extremely important that you implement specific strategies to keep holiday customers long after the season is over. Click here to learn how we can help your business.