Reducing Client Churn With Red Carpet Customer Service
By Harris Clarke
Sep 13, 2021
Reducing Client Churn with Red Carpet Customer Service

Every business has its fair share of roadblocks. According to industry leader Donna Weber, it’s estimated that more than 50 percent of client churn is related to poorly executed onboarding and equally poor customer service. While no one wants to lose a customer, churn is ultimately inevitable. So what can an organization do to mitigate how many customers they lose in the long run?


Importance of Understanding Client Churn

The first step is understanding the losses attributed to churn. This is not only in terms of lost revenue but also the costs associated with new client acquisition, which can be as much as five times more than retaining a current consumer.

For example, if your average monthly recurring revenue (MRR) per customer is $500, a 10 percent churn rate could cost as much as $50,000 every month. That’s a lot of money! While that churn rate may seem high, average churn rates can vary anywhere from two to 24 percent (depending on the age and history of a company). An online survey conducted by the Statista Research Department in 2020 found customer churn rates of as much as 25 percent in some of the top industries in the United States; including cable, retail, and travel.


Addressing Client Churn Through Better Customer Service

The main reason churn occurs for companies is due to low consumer engagement. This can include factors like a service no longer being a good fit, poor user experiences, and/or a lack of support.

Service providers can get ahead of this by having a streamlined and effective onboarding process with clearly defined goals and timelines. This helps consumers not feel disengaged or frustrated while learning a new product or service. This process should include defining churn metrics—what your organization considers churn to be based on your business model and services—then building your approach on how your team can best minimize churn rates around customer needs and wants. These parameters may change based on the types of clients using your services or advancements in systems and technology through a client’s—or even your own organization’s—business lifecycle.


It Does Make an Impact!

GuideCX places a high value on providing outstanding customer service to clients. Here are some examples we have compiled as a means of providing additional insight to reduce churn.

“What’s impressive is our needs have evolved since we first started, and the GuideCX platform has partnered with us every step of the way.”

—Tori S., Senior Customer Success Manager

Tori’s small business built its GuideCX onboarding process with a needs-based approach and found the client snapshot provided them with both an improved customer experience and a better internal process, going so far as to say that GuideCX anticipated the needs they would have a year after they signed up. This is a clear marker of keeping up with the evolution of a business’s lifecycle as defined by its churn metrics.

When a client is able to engage more easily with systems, they are more receptive to them. A recent study found that 92 percent of users would sooner abandon a website than reset their login credentials. Along with being available to clients, GuideCX has found that simplifying processes through a streamlined user experience is one of the best ways to reduce client churn.

Nobody enjoys feeling like they aren’t being heard, or worse yet, submitting a request for help only to have it seemingly sent into the void. Having a reliable, well-informed team readily available to assist clients helps them to not only resolve issues they may be facing but reaffirms your organization’s involvement with them. This dependability addresses the issue of low consumer engagement through a means of outstanding customer service.


While client churn comes with the territory of any business, providing exceptional customer service is ultimately the best method to offset it as much as possible, providing both your organization and your clients with the best chances for success. Contact GuideCX today and find out how we can help you become one of those success stories.

Harris Clarke

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