Churn is the enemy of every business. It’s much cheaper to keep customers than it is to find new ones. Marketing is expensive, so the best way to ensure you’re generating a decent return on your investment is to find a way to keep customers coming back for more.

For new businesses in particular, a high churn rate is a sign that something is fundamentally wrong — that the business practices, products or strategies are not aligned with the needs of the market. Maintaining a low churn rate is essential for a startup to flourish. Sometimes that means a pivot, but assuming the fundamentals are sound, simply a change in the way the business interacts with customers could cut attrition rates.

As an example, one of the biggest costs associated with my business (web hosting) is customer support. Given the high level of competition in the hosting industry, which tends to drive prices down, a customer with extensive support demands can easily accrue higher support costs than the plan they pay for generates. However, reducing the availability of support can be devastating for a company’s reputation, and it’s easy for a dissatisfied client to change vendors. 

To solve for this, my company began to offer a range of products that more precisely fulfilled the needs of various markets. Many of our clients had trouble building a hosting environment for Java applications from a basic VPS, for instance, so we launched Java VPS hosting plans that included everything they needed pre-installed. This wasn’t a huge change to our basic product, and adding the Java layer is essentially automated, but it made life easier for those clients and thus reduced their need for support.

But before you jump into introducing new products, ensure that your business is accurately measuring churn rates, as there’s no point implementing changes if you can’t track their effects. Try the following five simple ways I’ve used to reduce my own company’s attrition rates:

Deliver On Your Promise

Some consider it good practice to underpromise and overdeliver, but that’s almost never a tactic adopted by sales and marketing teams. Instead, many overpromise. It might not be fatal, but if a business seriously exaggerates the benefits of its products, customers won’t stick around for long.

Put simply, if you talk the talk, make sure you walk the walk. Otherwise, what may truly be a great product will turn out to be a disappointment.

In my industry, overpromising has become an epidemic: web hosting companies promise bandwidth, storage and networking speeds they can’t actually meet. The result is disgruntled customers. I don’t take this approach both because I find it dishonest, and because I trust my customers to understand that sensible limitations are necessary.

Don’t Take Existing Customers for Granted

While you’re plowing money into marketing and promotions to bring in new customers, don’t forget about your existing ones. After all, they, too, need to be nurtured.

You can be sure your competitors are spending big to make your customers their own, so it’s worth taking the time to reach out to your customers, ask them what they want, and offer them promotions and loyalty bonuses.

Don’t Rest On Your Laurels

Your customers chose you for a reason, but don’t let that be an excuse for stagnation. Even a large business with a loyal customer base is vulnerable to disruption.

It can be a difficult balancing act, but the businesses with the best retention rates — Apple, for instance — constantly iterate on their offerings while maintaining a recognizable core brand experience.

Talk to Your Customers

If your business experiences high churn rates, you might want to ask your customers why. I’ve found “exit interviews” to be a great approach here. Ask customers why they are no longer satisfied with the products and services your company offers. Ask what you can do better. You might not get the customer back, but the information they give you can prove invaluable for reducing churn rates overall.

For large businesses with many customers, exit interviews can take the form of online surveys using services like Survey Monkey or Google Forms. Personally, I like to set up in-person interviews for high-value customers. It’s usually as simple as calling a contact at the client company. Frequently, clients who choose to move on are more than happy to discuss why they made that choice. In one instance, a customer had decided to move to another host because it offered a pre-installed VPS environment for the development framework they preferred, which spurred us to introduce a range of SaaS hosting servers with the popular PHP frameworks – something we might not have considered otherwise.

Losing A Customer Is Better Than Gaining a Bad Reputation

Sometimes you will lose a customer. Fighting too hard to keep them is bad business. I’ve come across many a business that would rather make an enemy of their customer than give up on a sale or pay a refund.

But at the end of the day, a lost sale is better than a disgruntled customer. Make it easy for your customers to get a refund if they aren’t happy, and you’d be surprised how much goodwill it creates. Personally, we’ve found that when we go out of our way to be helpful, even when losing a customer, it helps clients maintain good memories of their time with us. 

Client relationships end, but careful thought and communication are the keys to ensuring they don’t die out before their time.