Analytics

Save Your Business From Churn: 9 Churn Risk Factors to Identify

Are churn risk signs hiding under your nose? 60+ businesses share their experience along with 9 different ways to find the signs early.

Masooma Memon Masooma Memon on March 31, 2022 (last modified on March 26, 2022) • 17 minute read

Accurate churn risk prediction can make the difference between a successful business and a struggling one.

The thing is: your marketing strategies can effectively attract lots of customers. But if you can’t retain those customers, you’re bound to fail or, at the very least, bear significant losses.

So how can you stop customers from leaving? The first step is to correctly identify churn risk factors. Doing so shows you which customers are at the verge of leaving, giving you ample opportunity to retain them in time.

The question now is: what churn risk factors should you be looking at? Let’s answer that for you based on insights we gleaned from 62 expert respondents.

Of these folks, 41.94% are in the B2C services or products field, 35.48% sell B2B services or products, and 22.58% are agencies (marketing, digital, or media).

On the whole, you’ll learn the following today:

Stripe (MRR & Churn) Dashboard Template

Dig in.

Where Can You Find Potential Churn Indicators?

Look for customer churn risks factors in negative reviews and direct complaints – a quarter of our respondents use these sources too.

Other places to identify churn risk factors include online community activity, website activity, NPS survey results, and support ticket data.

Where to find churn indicators?

How Often Should You Analyze Customer Churn?

41.94% of our respondents analyze customer churn on a monthly basis. A little over 20% also analyze churn risk factors on a weekly and quarterly basis.

How often do you analyze customer churn?

Of the people we surveyed though, we learned that about 2 in 3 companies have an early warning system that helps their CS prevent customer churn. Of those who don’t have that kind of system, the majority plans to implement one.

Do you have an early warning system that helps customer support prevent customer churn?

Such a system not only ensures you catch customers at risk of churn well on time but also makes it effortless to identify them on a regular note.

Best Tools for Tracking Customer Churn

A whopping majority, about 60%, use a centralized dashboard that aggregates data from different sources (like Databox) to track customer churn.

Best tools for tracking customer churn

The interesting part? A centralized dashboard makes it super simple to view the data on a single screen. This way, you don’t need to look at a million places for churn risk prediction. Instead, your dashboard shows it all.

Best Ways to Identify Customers at Risk of Churn 

Now for the meaty details on how you can identify customer risk factors:

  1. Keep an eye on the engagement rate
  2. Pay attention to unsubscribers
  3. Watch out for negative reviews and social media complaints
  4. Keep an eye on the complaints to the support team
  5. Identify behavioral cues
  6. Focus on your best customers
  7. Track churn KPIs
  8. Survey customers regularly
  9. Communicate often

1. Keep an eye on the engagement rate

For the fitness industry, in particular, tracking engagement helps you identify your churn rate.

Take it from Lift Vault’s Kyle Risley. “In my company, the best indication of churn is a slow decline in using our service. Customers are less likely to complain or reach out when they’re having problems using our site. Instead, they’ll slowly stop engaging on social media, stop visiting the site, until they eventually leave the platform altogether,” Risley points out.

“This is a trend for almost all companies in the fitness world.” This is why Risley thinks “it’s important to keep engagement high and to put off-platform relevancy in the services we provide. Tying our experience to one that a customer has when they’re not using our product directly is the best way to negate or prevent churn overall for us.”

So what are some ways to keep your engagement rate up?

Take a community-building approach. You don’t need to start a new community such as one on Slack. But use your newsletter, social media accounts, podcast, video channel – wherever you market – to build a tightly-knit community.

Building a strong community boils to creating relevant content and taking a value-first approach. So instead of thinking about business benefits, think about how your content can help your audience and get them to engage with you.

Putting effort here will not only up your engagement game but you can use the community to regularly source feedback – another good way to identify customer churn.

Related: B2B Social Media Strategy: 21 Ways to Drive More Engagement

2. Pay attention to unsubscribers

“From my experience, I know a customer is at risk of churning if they suddenly unsubscribe from our subscription list,” observes Doug Pierce of Sigma Computing.

“Unsubscribing is often a sign that they no longer value the content we are sending their way, and that their interest in our offerings has waned.”

But unless you have a small community, it can be hard to reach out to each unsubscriber personally. Personalized automation can help though.

In Pierce’s words: “it’s imperative to send a quick email acknowledging their removal from our emailing list while inquiring as to why they’ve chosen this action. Their response will determine the strategy we use to try and retain them.”

Remember: while you can leave an empty blank for them to fill, you can also make responding easy for them. How? By providing them with options explaining as to why they’ve unsubscribed (add “other” option too so those willing to share their reason can do so). This makes it simple for them to answer your question.

Related: 23 Effective Ways to Reduce Email Unsubscribes

3. Watch out for negative reviews and social media complaints

“Direct feedback, including negative reviews and social media complaints, is one of the best indicators of your customer’s churn,” opines Eduarda de Paula from Coupon Hunt.

The data you review from these sources will help you save a fortune before it’s late according to Paula. How? By catching their about-to-leave behavior, which gives you time to stop them from leaving.

“Customers can churn for any reason and by paying attention to the early signs, we could have a good stand of keeping them,” in Paula’s words.

“One of the signs that we’ve encountered is through reviewing their feedback. When we notice at-risk customers giving such negative reviews and social media complaints directly to us, then it implies that these customers have a problem with our product, service, or organization,” Paula explains.

“They may have had one bad experience with a contact center representative and decided that was enough to consider switching. Or, they flooded complaints and tried to share endless feedback, but didn’t feel heard,” says Paula, sharing some examples of poor customer experiences.

The solution to this? “Turn complaints into opportunities.” That’s what the Coupon Hunt does too.

Writes Paula: “We responded to them in the most respectful manner and made them feel that their reviews are valid, whether positive or negative. We listen to these customers with the thought in our minds that one loud complainer may be speaking on behalf of many, many others.”

Here’s another example of turning negative reviews into opportunities. “I remember that a few years back, a certain product from my company didn’t quite sit well with the customers,” writes Sam Cohen from Gold Tree Consulting.

“The bad reviews only had a negative impact on my company’s reputation, and I also observed an active decrease in sales. So, to eliminate the root cause of the problem, I had to talk to the buyers.

I proactively reached out to disgruntled and angry customers, asking them about their concerns. As a result, I figured out my buyers’ likes and dislikes, and the kind of products they really wanted.”

The result? “My team and I decided to discontinue the product with bad reviews and launch a better item. This showed the customers that I cared for them and improved retention. I was also able to enhance customer engagement and satisfaction, which boosted overall sales,” Cohen concludes.

In short, “We want to keep our customers; thus we always address the issue about churn customers right away,” notes Paula. “Good communication with them is really helpful to prevent them from leaving. We make sure they see what they are gaining if they stay with us, rather than stray away from us.”

Put another way, it’s essential you take the time to listen to your at-risk customers’ complaints. Acknowledge your mistake where you are wrong and do whatever you can to rectify it. This turns negative experiences into positive ones that not only retain customers but also help you make most of them loyal to your business.

Related: 12 Proven Ways to Encourage Customers to Write Reviews (According to 100+ Marketers)

4. Keep an eye on complaints to the support team

In addition to reviewing complaints on social media, track and study the complaints your customer support team gets.

At YourParkingSpace, for example, Charles Cridland notes, “We adopt a proactive approach to gauge the likelihood of customer churn. Tracking the ‘complaints to support’ has been an effective tool to detect the customers at risk of churn.”

“Frequent complaints accompanied by low satisfaction scores generally indicate that the customer is at risk of churn,” Cridland observes. “We hear them being irritated with the level of services and constantly complain about something not being up to the mark. They become less forgiving of our downsides.”

“Moreover, the customer support receives specific questions like, ‘what happens with my data if I close the account or move to the free tier?’ or ‘can I get partial reimbursement when terminating the yearly contract?’ These indicate that the customer is preparing to move away from the business and requires special attention to avoid the risk of churn.”

So you know what to look at, right?

Related: 15 Proven Ways To Reduce Your Average Support Ticket Response Time

5. Identify behavioral cues

“For a service-based business like ours, it’s really important to always be on the lookout for the hidden cues of dissatisfaction or restlessness,” comments Sam McEwin of BizWisdom.

“In fact, in my experience, account performance alone is a pretty poor predictor that a client is ready to leave. At my firm, we created our own model for understanding when a client might be at risk of churn based on behavioral signals and communication cues.”

McEwin explains: “We charted 3 main customer stages:

  • Trust
  • Confidence and
  • Advocacy

with 2 additional negative stages:

  • Mistrust and
  • Low Confidence”

Based on these, McEwin shares “we got our team together and discussed the signals associated with each stage. We then workshopped different activities that can be applied to move a customer from Trust into Confidence or from Confidence into Advocacy.”

“The outputs themselves, though incredibly useful are less important than actually getting the team together to focus the cues, behaviors, and actions associated with identifying and reducing churn,” McEwin adds.

“And once you have developed a shared language that is unique to your organization, the results can be long-lasting.”

In addition to creating your own behavioral cues, you can access customers’ behavior on your website too to identify churn risk factors.

This one’s a hat tip to Breeeze’s David Morneau. “The strategy we use to identify customers that are at the risk of churn is to assess their web activity. We have a comprehensive web tracking tool in place that monitors how customers interact with our website.”

“By looking at their activity, we can assess how satisfied or dissatisfied a customer is,” Morneau highlights.

Talking about more specific indicators, Morneau notes: “If a customer repeatedly visits the cancellation page, it is a clear indicator that they’re about to churn. This is when we need to step in and offer better deals or try to find a solution for their problem.

Another churn indicator is asking how they can download their user data. This clearly shows that they’re looking for alternative products and are ready to migrate.”

That said, the behavioral cues you need to be looking at can vary as per your unique business model and the industry you are in. Take Maid2Match, for instance.

Toby Schulz points out, “As a home services business, the best way we identify customers at risk of churn is by analyzing their behavior regarding the regular services they have booked in. If a weekly customer is regularly pushing back their service, we’ll suggest for them to move to a fortnightly or monthly service. They will then be less likely to completely cancel their services with us.”

So how does this strategy help Schulz’s team reduce their churn rate? “It is an inconvenience to the customer to constantly be rescheduling their services, even though it only requires a text or an email,” Schulz explains.

“After they reschedule several times, they could get frustrated and decide to drop the services all together. By being proactive, we avoid the customer churning.”

Related: Get the Most Out of Google Analytics’ Behavior Flow Report with These 6 Tips

6. Focus on your best customers

“The best way to identify customers at risk of churn is to focus on your best customers only,” advises Lottie’s William Donnelly.

“Most businesses spend their time making efforts on retaining customers that are most likely to leave or not make any purchases,” observes Donnelly. This can lead to wasted resources and a poor focus on providing an excellent experience to your best, most loyal customers.

In Donnelly’s words: “the best strategy is to invest time and effort on customers that are most likely to stay with your business and make purchases. By focusing on profit, the churn will be reduced automatically, paving the way for any business to perform better in terms of revenue.”

“This is the same strategy I used for my business when it came to reducing churn and maximizing profits,” Donnelly continues. “By leaving the customers who had no intention of buying, we got more time to cater to our best customers and their needs.”

7. Track churn KPIs

“A decrease in customer usage and engagement has always been a telltale sign of forthcoming customer churn for me,” outlines Mark Liu of iMarku.

“I track specific KPIs that detail a customer’s usage of my service and watch out for churn indicators. Some of the most reliable churn indicators in my experience are:

  • A decrease in the time a customer spends on the site
  • A decrease in support tickets sent to CS channels, and
  • An increase in customers downgrading services.”

Liu continues, “these indicators are reliable predictors for customer churn and they provide useful insight in strategizing on how to reduce churn rates. I use these as references when I strategize on how to better my conversion and loyalty rates.”

One Thing Marketing’s Dan Skaggs also looks at user engagement metrics as their go-to way for spotting churn risk factors.

“Often, businesses tend to lose consumers when they’re no longer interested in the products and services offered. So, for me, this is the single-biggest giveaway, i.e stop investing in things that don’t attract customers.”

Sharing their experience further, Skaggs adds: “I noticed over the years how the consumers were less responsive to email marketing and we were pouring our time and energy into it. Therefore, we changed our branding strategies and focused more on the company’s social media presence.

“This helped measure the churn rate of my business by optimizing our analytics results. This was possible because of incorporating SaaS marketing into our work model. The different tools and metrics like Google Analytics enabled us to gauge our customer satisfaction and brand engagement as well. It has reduced the churn rate for our business.”

8. Survey customers regularly

Recall that we suggested taking a community approach for growing your social media engagement to gather regular feedback. This suggestion by Webris’ Ryan Webris is similar.

In Webris’ words: “I identify the customers at risk of churn by regularly surveying them. It helps me gather the data required to understand where they stand. If they give you a detractor or even a neutral Net Promoter Score (NPS), it means they are thinking about moving on from your product or service. Then it’s time to step in and take the required action to stop them from leaving.”

To add, you can also gather qualitative data in your surveys. This will help you understand what’s retaining customers and what exactly is hindering them from continuing with you.

At Virtual Holiday Party, sourcing feedback for churn risk prediction is equally important. Michael Alexis from the team observes, “We send a guest experience survey to clients after every event. The survey prompts for questions like ‘how would you rate your host?’, ‘how would you rate customer service?’ and open-ended questions for more feedback.

The ratings are on a 1 – 5 scale, and we use automation to help identify survey responses indicative of churn. For example, if someone rates aspects as ‘below expectations’ then we notify the relevant department manager to take a closer look. This combination of software and human oversight goes a long way to identifying and helping to prevent churn,” Alexis summarizes.

Related: The Most Valuable Customer Service Interview Questions for Gathering Customer Feedback

9. Communicate often

Lastly, it’s important to always keep communication lines open with customers. But, again, instead of taking a sales-first approach, focus on building genuine relationships with your customers. This helps both identify churn risk and reduce it too.

In fact, according to Doug C. Brown of CEO Sales Strategies. “A client who has gone cold in communication is an indicator that something is not working. It’s our job as the seller to stay in touch with them.”

“In my experience, it’s usually that communication is lacking from the seller’s side, and therefore, the client loses the top-of-mind awareness.”

“We should always be building a relationship rather than asking for a sale at the end of their agreement term,” suggests Brown. If a client is unhappy, and we leave them to their own thoughts, they’ll become unhappier.”

“Without communication, they’ll feel that you don’t care. Complaints that are unresolved are an indicator of an unhappy client,” Brown adds. “No communication should also be construed as an unhappy client. Your job to get recurring revenue is to have customers engaging throughout their agreement term.”

Stripe (MRR & Churn) Dashboard Template

Monitor Customers at Risk of Churning in Databox 

Now that you know the top ways to identify churn risk factors, get to work today.

The first step of course is to begin monitoring customers at risk. Thankfully, with a Databox churn dashboard, tracking at-risk customers is a breeze.

All you have to do is to plug your data sources into Databox. From there, the dashboard software will present all the churn metrics on a central screen. It’ll also automatically update the data in real-time.

This way, every time you monitor churn, it’s going to be easy to view all the data on one screen. Most of all, you’ll get fresh data at each review, which will help you better identify customers at risk.

So what’s holding you back? Sign up for Databox for free today and start monitoring at-risk customers the easy way.  

About the author
Masooma Memon
Masooma Memon Masooma is a freelance writer for SaaS and a lover to-do lists. When she's not writing, she usually has her head buried in a business book or fantasy novel.
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