April, 2021 Appgain

.io.i

White Paper

Churn Rate:
All the Why’s & How’s to
Decrease Churn Rate
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INTRODUCTION
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With the COVID-19 Pandemic, the digital marketing playground is filling up with new players. We, as
marketers, are challenged more with the factors like authenticity, speed, innovation & adaptability. The
ones who fail to keep up with the ever-shifting needs of their customers & stake-holders are eliminated
& the ones who are customer-centric and data-driven prevailed.

How did they do that?

For example, they knew the chances of selling to existing customers are 60-70%, while the rate is 5-
20% with new users.
This means, increasing the loyal customer rate, decreasing the churn rate will bring you more
purchases.
They worked on keeping the customer & increasing their loyalty, communicate with them based on
their behavior and buying experience.

Today & through this document, we will help you

achieve that tricky balance between increasing your sales
& decreasing your Churn Rate simultaneously, starting by
defining what exactly churn rate is.
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What is Churn Rate?

Churn rate is the number of your customers who have suddenly stopped purchasing or using your
service or product for an extensive & given period. For sure, the churn rate has varied according to the
industry.

Why is Churn Rate Important?

● It's one of the most vital indicators of your customers' satisfaction with your service. So you
can go deeper with understanding the reason for the dissatisfaction & solve the struggling
steps of your funnel
● Churn rate is a measurable metric Quantifiable data is more efficient & trusted in terms of
developing your business & your campaigns
● Understanding the churn users' pattern will allow you to solve it & facilitate your customers'
workflow and experience. After that, it becomes easier to engage with new users more
efficiently & you can prevent them from becoming churn
● Decreasing the churn rate helps you to test & identify ways to increase the loyalty of your
users. Loyal customers are worth ten times more, rather than a user who made the first
purchase
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How to calculate the Churn Rate?

Churn's impact on sales & revenue

After the COVID-19 Pandemic, the digital world expanded enormously:

● The total number of mobile connections has increased by 72 million (0.9 percent) & reached
8.02 billion at the start of 2021.
● Internet usage has increased 7.3% (316 million) since January 2021, and it reached 4.66 billion
in January 2021.
Now, it's even harder to keep users tracked in your service. There are cheaper, more qualified,
more expensive, more organized options in each industry. What will bring you the growth comes
from understanding the churn and working on reducing it.
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Why Does Churn Happen?

● Your UI might be complicated

● The user may not be satisfied with the product offer or the after-sales support...
● The user may have a pending complaint, refunds, or received not completed order
● The purchasing process might be long and distracting for the user.
● Your product/ value may seem insufficient for the user's problem.
● They might have heard a nasty comment about you.
● They may have chosen your competitor for some reason.
● Your customer service may have given an unqualified service.
● They might have needed a push to purchase, which you didn't send

What challenges do marketers face when trying to decrease the churn

rate?

● It was knowing the reasons for the inactive users.

● Lack of user insights.
● Poor segmentation of users.
● Long action & measurement process.
● You are not analyzing the outcomes of the measurement.
● Making campaigns & actions that are not possible to measure or track.
● They are insisting on an assumed value instead of listening to the customer.
● Being unable to get feedback directly from the user or monitor his in App behavior
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What's the
Solution?
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Get To Know Your Users.

● Make rich user profiles: Know how to approach the user in what way after which behavior
● Customize your campaigns from each segment. Test & measure them if it satisfies your aim.
● Do A/B tests. Don't repeat the common mistake of assuming your campaign will fine from the
get-go, no matter how optimized it is. Test, test and test some more and respond to what your
customers and users are telling you through these tests.

● Collect customer feedback: Get in touch with our customers and engage with them when and
how they want to be communicated, whether questionnaires, social media posts or email
messages. These conversations, if done right, will give you insights into their objectives, pain
points, goals, and desires & how your service or product can help them do precisely that.

● Use deep linking: Don't lose your user just because he/she doesn't have your app. Direct them
to the download page, which offers both you and him an uninterrupted fluid buyers journey &
workflow

● Adapt loyalty programs. If you award & motivate your users for being loyal, it will make them
stick around and invite more people to join.
● Give personalized discount offers in exchange for the information about why they're leaving. It
will feed your customer insight, and both might prevent the user from unsubscribing.
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● Are you competitive enough? It's most probably impossible in your industry that you are the
only one who offers a solution/ product or offer. That's why you need to stand out in the way
which attracts your target segment the most.

● Capitalize on your strength points: Analyze which topics are your strengths and at which
points your competitors win. Measure if those features are valuable for your users. If so, apply
them
● Don't forget to promote the shared value of what you offer through your campaigns. Ask your
team if it means something to your target persona
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● Don't forget to retarget. When you've detected one segment of a user that is interested in
something you did or something related to your product, make the most out of that
information

● Adapt loyalty programs. If you award & motivate your users for being loyal, it will make them
stick around and invite more people to join.
● Give personalized discount offers in exchange for the information about why they're leaving. It
will feed your customer insight, and both might prevent the user from unsubscribing.
● Focus on your current users: Keep in touch with your existing users & constantly offer them
value
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● Use omnichannel marketing. Approach your users with attractive messages, rich push
notifications, or emails.
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Omnichannel Marketing Solution

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