Why Customers Quit You and How to Keep Them

Churn isn't just a metric; it's a wake-up call for your entire organization

There’s a saying that “customers don’t churn, they quit you,” which couldn’t be more true. Irrespective of their experience, when a customer leaves, they’ve decided that the product or service you provide didn’t meet their expectations. That’s a serious problem, especially when you consider that it’s far easier to sell more to existing customers than to find new ones. So, when churn happens, it’s a red flag worth exploring.

Why Do Customers Churn?

Churn happens when a customer stops doing business with you or cancels a subscription. Below are some common reasons why customers might churn:

1. Poor Onboarding: A weak onboarding experience can leave customers feeling lost, frustrated, and unsupported, exactly what you don’t want. If your customers don’t understand how to use your product or service effectively, they’ll quickly check out.

2. Customer Support Issues: When customers can’t get the help they need, they’ll lose trust in your product. Timely, helpful, and empathetic support is key to retention.

3. Pricing Problems: Over time, customers may feel that your pricing doesn’t align with the value they’re receiving, especially if they’re not using all of your features. Or they may simply find a cheaper alternative.

4. Lack of Product Updates or Innovation: If your product isn’t evolving or improving, customers will look for alternatives that offer something fresher and more innovative.

5. Poor Relationship Management: Churn often happens when customers don’t feel a personal connection or a consistent relationship with your team. Without proactive relationship-building, they may feel neglected. If your pricing doesn’t allow for a dedicated success or support team, make sure your CRM tracks detailed notes so every customer interaction feels personal.

6. Poor Fit: Sometimes, churn happens because the customer wasn’t the right fit for your product in the first place. This could result from an overly optimistic sales process or a mismatch between customer expectations and the actual product capabilities.

At the end of the day, these reasons all point to the same thing: customers don’t see the value. Your solution doesn’t solve their problems the way they thought it would, the ROI isn’t there, or they’ve found something better or cheaper. When a customer buys your product, they’re trusting you. They’ve done their due diligence, built a relationship with you, and chosen you because they believed in the promise. They can’t afford to make a decision on something as important as your product or service and not have it work as it should. They lose credibility, end up spending more time than they should on issues, and it becomes a losing situation, both for them and for you.

Churn Numbers: What’s Normal?

So, what’s a “good” churn rate? Well, that depends on your industry, business model, and customer type. That said, there are some general benchmarks for B2B SaaS and software services companies. According to UserMotion’s research, churn rates in B2B SaaS peaked at 4.4% in 2023 but dropped to 4.2% in 2024. Out of this, 3.5% came from voluntary churn (decisions made by the customers) and 0.7% from involuntary churn (payment failures).

Research also shows that churn is more pronounced in the first three months. 36% of companies in the study emphasized that the first 90 days were critical for retention. In fact, churn rates dropped significantly from 10% in month one to 4% in month three. That’s why it’s crucial to nail your onboarding process—it can have a tremendous impact on retention early on.

You can access the churn report here: https://usermotion.com/saas-churn-rate-benchmark-2024

How to Reduce Churn

Reducing churn isn’t a one-department job. It takes a holistic approach across the whole organization. Here’s how you can make an impact:

1. Invest in Customer Onboarding: Your onboarding process sets the stage for everything that follows. Build a process that helps customers understand how to use your product, establish a relationship, and reinforce value at every touchpoint. The team at Winning by Design developed the image below that highlights key churn points throughout the onboarding process. Your team should know this and work to reinforce value at the suggested points.

2. Monitor Customer Health and Engagement: You should be tracking how your customers are using your product. If they're not engaging or using key features, they're more likely to churn. Look for red flags like decreased logins, inactive users, or an increase in support tickets.

3. Offer Excellent Customer Support: This one’s a no-brainer, but it’s essential. Ensure you offer multiple support channels and that your team is responsive and empathetic. Don’t wait for issues to escalate—reach out proactively to understand customer needs and resolve problems before they become bigger issues.

4. Tailor the Customer Experience: Segment your customers and tailor your outreach to address their specific needs. Regular check-ins can help you identify any issues early on and provide value that makes them want to stick around.

5. Provide Ongoing Training and Education: Offer regular training sessions, webinars, and product tips to ensure customers are making the most of your solution. The more engaged they are, the less likely they’ll be to churn.

6. Enhance Customer Relationships: Don't just sell a product and forget about the customer. Foster relationships by checking in regularly, understanding their pain points, and showing them how they’re benefiting from your solution.

7. Implement a Feedback Loop: Continuously ask for feedback and act on it. Use NPS or customer interviews, but don’t rely on one method—listen to what your customers are saying and show them that you’re actively working to improve their experience.

8. Align Pricing with Value: Be transparent about your pricing. If customers feel they’re not getting the value they expected, they’ll leave. Make sure that the solution matches the cost, and use churn data to reassess your pricing strategy when necessary.

9. Focus on Product Innovation: Keep your product evolving. Regular updates and innovations show customers you’re committed to delivering value, and not just resting on your laurels.

10. Loyalty and Renewals: Start the renewal conversation early. If you’ve created strong relationships and continually demonstrated value, renewal should be a breeze.

Churn Is an Organizational Challenge

Churn isn’t just a metric. It’s a reflection of your business’s health. And it’s not just a customer success or product issue—it’s an organizational one that requires collaboration across all departments. I’ve walked through customer success, support, and product above. I believe marketing and sales also play a critical role. Here’s how they can contribute:

Sales Alignment with Customer Expectations: Sales is generally the first point of contact. If they set unrealistic expectations about your product or service, customers will be disappointed later on. Nothing erodes that hard-earned trust faster than this. Ensure your sales team is aligned with the product’s true value and limitations to prevent disillusionment and churn. Also, sales should ensure they’re qualifying prospects properly so that only the right-fit customers come on board. When customers aren’t in the ICP, they are more likely to churn because the product or service may not meet their needs.

Marketing’s Role in the Customer Journey: Marketing is an important part of the prospect journey, and I would argue it’s an equally important element of the customer journey. From onboarding and engagement to feedback loops, reference programs, ICP optimization, and nurturing, marketing can and should help proactively engage customers. We know that there are significant risks during onboarding of churn. Is marketing engaged, and has it developed programs to help educate customers during this window? From creating onboarding materials such as videos, guides, blogs, webinars, and FAQ content, marketing can augment what success is doing and help customers quickly understand how to use the product and realize value. This content can proactively address common concerns or misunderstandings early on to reduce frustration and improve retention. Marketing can also:

1. Continue to share customer case studies and showcase success. Case studies aren’t just for prospects, they are for customers as well. By showing customers that their peers are seeing tangible value in the solution/services, marketing can help build trust and help customers feel confident in the choice they made.

2. Nurture, nurture, nurture. Some say email is dead, but I don’t agree. It needs to be targeted, relevant, and timely (no spamming). Marketing should be sending personalized, valuable content through nurture campaigns to help customers get the most out of the product or service. From educational content to reminders about features they haven’t used yet, nurture emails done right help customers see the ongoing value, and they engage, reducing the likelihood of churn.

3. Create references and listen. Partner with the success, onboarding, and account management teams to understand which customers are seeing value and create a program to get their feedback and ideally, join your reference program. Additionally, by proactively listening to what customers are saying, marketing has an incredible opportunity to ensure the messaging they are going to market with is right. Misalignment from the start increases the likelihood of churn, so marketing can influence churn by ensuring better messaging in their campaigns.

4. The creation of re-engagement campaigns when a customer is at risk of churning is a big opportunity for marketers. If a customer is identified as being at risk (they haven’t logged in, use has dropped, decision-maker has left the company), marketing can and should develop re-engagement campaigns leveraging gifting, targeting email, specialized promotions (user groups, conferences, etc. - think beyond a discount), or personalized content to encourage customers to re-engage and see the value in the product or service.

For marketing to work within the install base, transparency and communication cross-functionally are critical. Marketing (and sales) needs to be mindful when introducing campaigns or programs. If a customer is not yet fully onboard or satisfied with their current product usage (not yet seeing the value), pushing additional products could feel like a sales push rather than working together to resolve an issue. This could prompt churn. GTM alignment is critical, and the communication the teams share here is important.

Churn doesn’t have to be an inevitable part of your business. By addressing it from every angle—sales, marketing, customer success, and product—you can turn your churn problem into an opportunity for growth. Building stronger relationships, reinforcing value, and creating seamless experiences will help you retain customers and drive long-term success. If you’re ready to reduce churn and build a more loyal customer base, don’t hesitate to reach out.

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