What is Lead Churn? – Why it happens and How to reduce it?

May 31, 2022

Lead Churn - Why it happens and how to reduce it?
Table of Contents

How about losing fruits that you grew with all your sweat and hard work? 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, even a small churn can quickly cut the valuation and revenue in half.

What is Lead Churn?

Lead churn is basically the number of leads that are leaked out from your system when 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 time your team members are so busy that these old, somewhat 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 and How does lead churn happen?

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 is yet in the premature stages. 
    confusion and delay meme | Lead churn
  2. They remain untouched for a longer period of time:
    With the use of highly functional Sales CRM, establish touch base as soon as they enter into the system. Employ WhatsApp and Facebook integration tools, so as to not lose even one lead. Also, 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 that creates engagement and allows users to stick with you.
    While callers struggle to understand the interface of several typical CRMs in the market, TeleCRM users only focuses on improving the sales process.
  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 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.


2. They remain untouched for a longer 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.
3. By taking care of the incoming queries through incoming calls and WhatsApp etc.

Crushing customer churn rate and lead churn rate can be a 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 time to do that with the right questions and the 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.

Article Author

Afnan Haroon is Sr. Marketer, Creative Content Strategist, and handles TeleCRM branding. She has been crucial in growing TeleCRM from scratch to a successful startup. Known for crafting engaging campaigns and impactful content. Afnan's work helps sales teams excel with TeleCRM's innovative solutions.