Customer Attrition vs. CRO: How to Balance Retention and Conversion

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Churn is the percentage of customers who stop returning to a company. Fortunately, there are ways to convince them to stay. Many brands invest resources in attracting new faces, seeing it as the key to an effective growth strategy.

What is churn?
Churn is the loss of customers over a given period. It is measured as the pitcairn island b2b leads percentage of customers who stop returning to purchase from the company over a set period of time. In other words, if your customer retention rate is declining, you are experiencing churn.

The decline is most often associated with software-as-a-service companies operating on monthly or annual revenue models, although it is also true for e-commerce and brick-and-mortar retail.

There are two types of outflow:

1. Active outflow

This happens when a customer consciously decides to end their relationship with a company. For example, they cancel their subscription to a delivery service.

2. Passive reduction of the number

This occurs when a client gradually leaves a company without formally terminating the relationship.

What causes customer churn?
Understanding why customers leave a business can help you solve the problem. While some factors are out of your control—like a loyal customer leaving a local store—you can eliminate many of the reasons why customers leave.

Here are some common issues that can turn off customers:

Prices are not competitive enough. If customers continually find better deals elsewhere, they may be tempted to jump ship, even if they like the products.
Product quality does not meet expectations. When products arrive damaged, wear out quickly, or do not perform as advertised, customers lose faith in the brand.
Customer service needs to be improved. Long wait times, unhelpful responses, or difficulty finding a real person can cause customers to leave.
Competitors offer better alternatives. If competing brands innovate faster or provide unique features that you don’t have, it can steal customers.
Offerings don't keep up with changes in the market. If you don't adapt to new trends or technologies, your business may appear outdated and less relevant.
Brand values ​​do not align with customer values. Customers often seek brands that share their ethical, social, or environmental concerns and may leave if they feel there is a mismatch.
How to Calculate Customer Churn Rate
Knowing your churn rate can help you understand how effectively you’re retaining customers. Measuring it can help you answer questions like: Is your churn rate seasonal? When do customers typically leave? Which products retain customers longer?

Use this formula to get a quantitative answer to these questions:

Churn Rate = (Customers Lost During Period / Customers at Beginning of Period) x 100



What is a good churn rate?
A good attrition rate depends on your industry, business model, and ideal customer profile. Set a realistic goal based on context, rather than getting hung up on “good” numbers. What’s acceptable in one sector may be alarming in another.

For example, a high-end jewelry store may have a relatively high churn rate because customers make large purchases frequently but infrequently. For this type of business, it makes sense to focus on getting positive feedback from new customers to help ensure a steady flow of customers.

How to Reduce Churn
There are various strategies to solve the problem of customer churn. By combining methods such as retargeting ads and automated emails, you can create a winning formula that will keep your retention rates high and reduce churn. Here are some tips to get you started:

1. Focus on attracting the right clients

While it can be tempting to cast a wide net, engaging the right audience leads to more meaningful engagement and higher conversion rates. Tailor your engagement efforts to reach customers who need and value what you offer.

Create an ideal customer profile for your business by identifying their most valuable characteristics, behaviors, and needs. Include customer data such as demographics, psychographics, purchasing habits, and the pain points your product solves.

Use this image to guide your customer acquisition efforts, from email campaigns to influencer partnerships.

2. Improve the onboarding process

If a customer doesn’t know how to benefit from a product, they will inevitably abandon it. The onboarding process can be critical. Once you’ve built trust, begin the education process with clear instructions and guided tours to get customers up and running right away.

3. Creation of loyalty and referral programs.

Loyalty programs can be a game changer, reducing churn by encouraging repeat purchases and building a sense of belonging. These programs strengthen customer relationships by providing exclusive perks, early access to new products, or personalized discounts, making customers feel valued and more likely to stick around. Referral programs turn satisfied customers into brand advocates, encouraging them to bring in new business while strengthening their connection to the brand—a win-win situation that can reduce churn rates.



4. Remind customers that you exist

A well-timed email highlighting new features can encourage users to explore (or re-examine) a product; a strategically placed retargeting ad can persuade a regular visitor to “Add to Cart”; and a “We miss you!” text message with a special offer can re-ignite interest. The goal is to stay on customers’ radars without being “bombarded.” Create value in every interaction, not just the noise in their inbox or social media feed.

5. Survey your regular customers

When customers leave, they take valuable information with them. Word may get out that customers are turning down the monthly artisan cheese sale because the portions are too big for small families. A company that makes custom running shoes may find that customers are leaving because of poor service. Don't miss this important information.

Conduct satisfaction surveys to understand the underlying causes of turnover. Ask questions such as:

What prompted you to unsubscribe?
Were there any features that you felt were missed?
How could we improve the quality of your service?
What would encourage you to come back to us in the future?
The answers to these questions will help you find an approach to keeping customers afloat. You will be able to refine your offerings and smooth out any difficulties that arise on the way to attracting customers. The changes you make may just bring back some old friends and turn them into your most loyal supporters.