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What is Customer Churn & Lead Churn? How to Reduce it?

Afnan Haroon · May 31, 2022 · 1 Comment

How about losing fruits which you grew with all your sweat and hardwork? Nobody ever wants it right!
The same is the case with businesses.
No business ever wants to lose its customers because:

  • It takes a lot of effort to nurture and cultivate a lead into a customer.
  • The cost of acquiring a new customer is way more than retaining the current one.

When it comes to SaaS firms, churn may refer to either the loss of subscribers or the monthly income lost as a result of cancellations and client departures. It’s even more important for a SaaS firm to have a low churn rate, given it’s estimated that 90% of SaaS businesses fail.


It’s a big de-motivator and a major problem that requires immediate attention because a small churn can quickly cut the valuation and revenue in half.

Table of Contents

  • What is Customer Churn?
    • Why/How does customer churn happens?
    • How to reduce/prevent customer churn?
  • What is Lead Churn?
    • Why/How does lead churn happens?
    • How to reduce/prevent lead churn?
  • Difference between Customer churn and Lead churn

What is Customer Churn?

Customer churn is the number of consumers who have ceased utilizing your products and services over a period of time.

There are few companies that can bear this for a period of time, but most of them cannot stand this condition for long. They either shut down or make changes to their plan. 

For this reason, it becomes extremely necessary to calculate the churn rate. It’s both a scary and an important metric to note. The churn rate can be calculated by dividing the number of clients you lost over that period by the number of customers you had at the start.

Churn rate can be calculated by d by dividing the number of clients you lost over that period by the number of customers you had at the start.
Source: Kpimax

Why/How does customer churn happens?

Customers churn due to any of the following reasons:

  1. Customers have trouble using your product: Find difficulty understanding the technicalities of the product.
  2. Customer experience: This is one of the underrated but the most important reason for customers leaving your business. They don’t just leave out of the blue but might face issues which weren’t understood or answered in the required manner.
  3. They don’t feel the need for your product at that point in time.

Figure out a way to create a permanent recall, so that when need the product later, they have you at the back of their head. 
Using TeleCRM filters, one can easily segregate these leads and run a bulk message WhatsApp campaign.

How to reduce/prevent customer churn?

If you want your customer’s to stick around, it’s very important to understand as to how can you reduce the churn rate. 

  1. Call your customers regularly-  Schedule time to talk to your customers in 1×1 conversations. Be keen on knowing what they love and what they ignore about your product.
  2. Send new customers a personal WhatsApp text/ video message- Once you onboard a set of new customers, send them a personalized video/ text message which will help the customer feel like more than just a number, and will help establish a personal connection.
  3. Focus on product stickiness- The more people rely and depend on your product, the more they tend to stick with it.
  • For instance, TeleCRM is one such CRM software that serves for all the calling needs of businesses at one single place. That is one can place calls, send SMS, WhatsApp, and Email, from one single place.

    Can even receive leads directly into the system through various available integration. As a result of it what happens is, that users tend to spend their entire day at one single place, incorporating its use in almost all their activities.
  1. Increasing value over time- Continue giving your clients more than what they expect.
  2. Keep educating your customers- Because it builds customer’s trust, reduces complaints and enhances customer loyalty.

What is Lead Churn?

Lead churn is basically the number of leads that are leaked out from your system when the executives fail to nurture them.

A salesperson talks to 50-60 leads per day on average. Closing about 1-2 deals from the pipeline. Out of the rest, there are 8-10 leads that are actually interested but not ready to buy right away.

 What happens to those leads?
Most of the times your team members are so busy that these old somewhat interested or interested leads are lost in the system.

This is also partly because there is no system to quickly find and retarget these leads.

However, for whatever reason, they do not reply, are reluctant, or unable to purchase. These leads fail to become your prospects.

Many of these leads become so cool that they even fail to become your prospects

Why/How does lead churn happens?

There might be various reasons to lead churn. A few can be listed as:

  1. The disconnect between marketing and sales department– The misalignment between marketing and sales department and their inability to identify if a lead should be moved forward in the sales funnel or are yet in the premature stages. 
  2. They remain untouched for a longer period of time: With the use of highly functional CRM, establish touchbase with the leads as soon as they enter into the system. employ WhatsApp and Facebook integration tools, so as to not lose even one lead and also that there is no delay in connecting.
  3. Found the product difficult to use: Remember how you struggled with photoshop but Canva suddenly made all of us graphic designers?
    It’s the simplicity of the product which creates engagement and allows users to stick with you.
    While the callers struggle to understand the interface of several typical CRM’s in the market, TeleCRM users only focus on making the sales process better.
  4. The product doesn’t fit his needs: Multiple times it’s only after the leads take a demo and explore all the features, that it becomes clear if it fits his need or not.
  5. Lack of supporting elements: Make sure what you offer is reflected in other places too, such as your website or social media handles.

How to reduce/prevent lead churn?

Reducing lead churn means preventing the leads to leak from the system. 

With TeleCRM you can just use the right filters to quickly find these leads, assign or distribute them to the right team members and then sit back and watch the reports of the campaign in real-time. 

Plus once you start thinking about churn, there are multiple ways to get in touch with these 2 types of people

  1. Through distributed calling campaigns.
  2. Through WhatsApp/SMS campaigns for retargeting (internal link).
  3. By taking care of the incoming queries through incoming calls and WhatsApp etc.

Difference between Customer churn and Lead churn

Customer Churn

Lead Churn

Meaning

Customer churn is the number of consumers who have ceased utilizing your products and services over a period of time.

Lead churn is basically the number of leads that are leaked out from your system when the executives fail to nurture them.

Why does it happen?

1. Customers have trouble using your product.

2. Customer Experience.

3. Doesn’t fit in their use case.


1. Disconnect between marketing and sales department.
2. They remain untouched for a longer period of time.

3. Found the product difficult to use.

Ways to Reduce

1. Call your customers regularly.
2. Send new customers a personal WhatsApp text/ video message.
3. Focus on product stickiness.

1. Through distributed calling campaigns.
2. Through WhatsApp/SMS campaigns for retargeting (internal link).
3. By taking care of the incoming queries through incoming calls and WhatsApp etc.

Crushing customer churn rate and lead churn rate can be an difficult task unless and until one has a proper system in place to understand the needs of the customer.

And it really doesn’t take much much time to do that with the right questions and right tools:
Simple questions like

  • Who is not using our product or service actively?
  • Who has reduced coming back to you with support queries?
  • What’s the general trend of support queries?

And employing effective methods like Strategic calling campaigns, targeted WhatsApp bulk messages and follow-ups can be a game-changer.

Sales Business growth, TeleCRM filters

Reader Interactions

Comments

  1. treks says

    June 4, 2022 at 1:00 am

    Good way of explaining, and fɑstidious article to ߋbtain information on the
    topic of my presentation focus, which i am going to present in college.

    Reply

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