Churn Rate at a minimum: how businesses can avoid losing customers and what CRM is for
Posted: Mon Feb 24, 2025 4:14 am
Customer churn is always painful, but with consumers’ ever-increasing choice, maintaining a stable customer base has become a key success factor for any business. A high churn rate undermines a company’s financial stability, slows down its growth, and reduces its market position. Recent studies have shown that even a small increase in customer retention leads to a significant increase in profits, so it is important to manage this rate effectively.
It is important to understand not only the overall churn rate, but also the deeper reasons for customer loss. This could be a product that does not meet consumer expectations, an insufficient level of service, or competitors with more attractive terms. Without analyzing churn factors, a business risks not adapting to changes in the market and customer needs and being left behind.
The CRM system here is not just a tool for maintaining contact with customers, but a true strategic partner. It collects and analyzes data on customer behavior, their preferences, and interactions with the business. With the help of CRM systems, you can predict potential churn risks, respond to negative signals in a timely manner, and implement personalized retention strategies.
In this article, we will explain what churn rate is, why it is critical for a company’s development, and what CRM system functions control customer churn. We will look at practical cases, share tips, and show you how to integrate CRM into business processes to achieve maximum results. Increasing customer loyalty is not just about retaining current customers, but also about new opportunities for business growth and development.
Content
What is customer churn?
Why businesses lose customers: the most common reasons for customer churn
Reducing churn rate with CRM
Sales funnel without customer churn in NetHunt CRM
Conclusions
Popular questions
What is customer churn?
Customer churn is a measure of the number of people who stop using a company’s services or products. It is usually expressed as a percentage or a monetary amount. Customer churn is natural in any business, but the acceptable level of this indicator varies from industry to industry.
In marketing, this metric is known as albania phone number list churn rate (CR). It’s especially important for companies that operate on a subscription basis, meaning that a monthly fee for using a product or service constitutes a significant portion of their revenue. It’s most often measured monthly, quarterly, and annually.
The higher the churn rate, the more a company needs to focus on customer loyalty measures. For example, you can personalize customer interactions, regularly collect feedback, and improve the product or service. CRM systems are a key tool in this strategy, as they store a complete history of customer interactions, allow you to analyze their behavior, and predict the possibility of churn before it happens.
How to calculate customer churn rate
Let's consider the difference in approaches to calculating churn rate.
The first approach is based on comparing the total number of users at the beginning and end of the period.
C1 — number of customers at the beginning of the period;
C2 — number of customers at the end of the period.
Let's imagine that at the beginning of the month you had 1,000 customers, and at the end of the month there were 800. We calculate CR using the formula:
CR = ((1000 − 800) / 1000) × 100% = 20%
A positive customer churn rate indicates that you have lost 20% of your customer base in a month.
Another formula for calculating customer churn rate:
C1 — number of customers at the beginning of the period;
C2 — number of customers at the end of the period;
C3 — the number of new users per period.
Now let's add a new metric to the first example. Let's say we managed to attract 500 people in a month. What would be the customer churn value?
CR = ((1000 + 500 − 800) / 1000) × 100% = 70%
A positive churn rate indicates a fluctuating customer base.
It is important to understand not only the overall churn rate, but also the deeper reasons for customer loss. This could be a product that does not meet consumer expectations, an insufficient level of service, or competitors with more attractive terms. Without analyzing churn factors, a business risks not adapting to changes in the market and customer needs and being left behind.
The CRM system here is not just a tool for maintaining contact with customers, but a true strategic partner. It collects and analyzes data on customer behavior, their preferences, and interactions with the business. With the help of CRM systems, you can predict potential churn risks, respond to negative signals in a timely manner, and implement personalized retention strategies.
In this article, we will explain what churn rate is, why it is critical for a company’s development, and what CRM system functions control customer churn. We will look at practical cases, share tips, and show you how to integrate CRM into business processes to achieve maximum results. Increasing customer loyalty is not just about retaining current customers, but also about new opportunities for business growth and development.
Content
What is customer churn?
Why businesses lose customers: the most common reasons for customer churn
Reducing churn rate with CRM
Sales funnel without customer churn in NetHunt CRM
Conclusions
Popular questions
What is customer churn?
Customer churn is a measure of the number of people who stop using a company’s services or products. It is usually expressed as a percentage or a monetary amount. Customer churn is natural in any business, but the acceptable level of this indicator varies from industry to industry.
In marketing, this metric is known as albania phone number list churn rate (CR). It’s especially important for companies that operate on a subscription basis, meaning that a monthly fee for using a product or service constitutes a significant portion of their revenue. It’s most often measured monthly, quarterly, and annually.
The higher the churn rate, the more a company needs to focus on customer loyalty measures. For example, you can personalize customer interactions, regularly collect feedback, and improve the product or service. CRM systems are a key tool in this strategy, as they store a complete history of customer interactions, allow you to analyze their behavior, and predict the possibility of churn before it happens.
How to calculate customer churn rate
Let's consider the difference in approaches to calculating churn rate.
The first approach is based on comparing the total number of users at the beginning and end of the period.
C1 — number of customers at the beginning of the period;
C2 — number of customers at the end of the period.
Let's imagine that at the beginning of the month you had 1,000 customers, and at the end of the month there were 800. We calculate CR using the formula:
CR = ((1000 − 800) / 1000) × 100% = 20%
A positive customer churn rate indicates that you have lost 20% of your customer base in a month.
Another formula for calculating customer churn rate:
C1 — number of customers at the beginning of the period;
C2 — number of customers at the end of the period;
C3 — the number of new users per period.
Now let's add a new metric to the first example. Let's say we managed to attract 500 people in a month. What would be the customer churn value?
CR = ((1000 + 500 − 800) / 1000) × 100% = 70%
A positive churn rate indicates a fluctuating customer base.