Reduce customer churn: 13 proven strategies

Customer churn occurs when customers stop doing business with your company over a given period. While it's easy to focus exclusively on acquiring new customers, reducing churn is one of the most powerful levers for sustainable revenue growth. It's about capturing low-hanging revenue and making the most of your retention efforts.

By focusing on key strategies like identifying at-risk customers, improving onboarding, and personalizing engagement, you can build stronger, longer-lasting relationships. In this article, we’ll dive into actionable strategies you can use to stop churn and plug the leak. Let’s dive in. 

What is customer churn? 

Customer churn, or customer attrition, refers to the rate at which customers stop doing business with a company over a given period. It’s a crucial metric for businesses and can send a signal for company performance. Low customer churn can indicate strong customer satisfaction and product-market fit, allowing companies to focus on innovation and expansion. 

On the other hand, high customer churn is a red flag that can signal strong competition, product gaps, or even broader economic challenges. For example, a software company experiencing high churn may need to revisit its pricing model, while an e-commerce brand might need to improve customer service to boost retention. Before implementing retention strategies, it's essential to understand that not all churn happens for the same reasons.

How to calculate customer churn rate 

In a previous blog post, we went over the formula to measure revenue growth. In today’s lesson, we’ll walk through how you calculate churn. The magic formula: 

(Lost Customers ÷ Total Customers at Start of Period) × 100 = Churn Rate (%) 

Understanding this metric helps businesses assess their retention effectiveness and compare it against industry benchmarks. According to 2025 industry benchmarks, average churn rates vary significantly by industry. SaaS companies typically see 13.2% annual churn, with monthly churn rates around 5 to 7%. However, recent retention data shows that even a seemingly low monthly churn rate of 5% results in losing nearly half (46%) of your customers annually, underscoring why retention must be a top priority. 

Enterprise-focused SaaS companies tend to have lower churn rates, around 1 to 2% monthly, while SMB-focused businesses often experience higher monthly churn rates of 3 to 7%. The key is measuring your churn consistently and understanding what drives it for your specific customer base.

Logo churn refers to the number of customers lost over a specific period, while revenue churn focuses on the amount of revenue lost due to churn. For example, losing a large, high-value customer can significantly impact revenue, even if the total number of customers lost (logo churn) is small. Tracking both types of churn is essential for gaining a full picture of how churn affects your business, helping you prioritize retention efforts that minimize financial losses. 

Why reducing customer churn matters 

It’s no secret that businesses want to keep their customers and build strong brand communities, but there’s another big reason why reducing churn matters: it’s one of the easiest ways to boost revenue without extra marketing spend  

Churn reduction is one of the most effective ways to increase revenue without additional customer acquisition costs. Studies show that increasing customer retention by just 5% can boost profits by 25-95%. That’s because bringing in new customers is far more expensive than keeping existing ones.

Keeping existing customers engaged and satisfied is the fastest way to capture low-hanging revenue, which are opportunities that require minimal effort but yield significant financial returns.

Voluntary vs involuntary churn: What's the difference?

Understanding the two types of churn is essential for creating targeted retention strategies. Each requires a completely different approach to prevent revenue loss.

Voluntary churn occurs when customers actively choose to cancel their subscription. This typically stems from dissatisfaction with your product, unmet expectations, competitive disadvantages, or pricing concerns. According to recent churn analysis, voluntary churn generally hovers around 7% for subscription businesses, with 44% of customers churning because they cannot achieve their desired outcomes.

Involuntary churn happens when customers unintentionally lose access to your service due to payment failures. Common causes include expired credit cards, insufficient funds, or outdated billing information. This type of churn accounts for 20 to 40% of total churn, yet it is often the most preventable. In fact, up to 70% of involuntary churn can be recovered with proper dunning strategies.

The key distinction? Voluntary churn requires improving your product and customer experience, while involuntary churn needs better payment infrastructure and communication systems.

Five main churn drivers 

Within these two churn types, there are specific triggers that cause customers to leave. We've outlined five of the most common drivers to help you build a strategy to combat them. Let’s take a look. 

1. Poor onboarding: If customers don’t get a strong start with your product or service, they may never fully understand its value. A complicated or unclear onboarding process can leave them frustrated and more likely to leave. Companies that provide interactive tutorials, personalized guidance, and hands-on support tend to see better retention. 
2. Lack of engagement: Even satisfied customers can drift away if they’re not regularly engaging with the product. If a SaaS company, for example, notices declining logins, it should implement strategies like automated check-ins, product update emails, or exclusive user webinars to keep engagement high. 
3. Slow customer support: Unfortunately, slow response times, unhelpful agents, and unresolved issues create frustration and could push customers toward competitors. Offering always-on support, self-service knowledge bases, and proactive assistance can significantly improve customer retention. 
4. Pricing issues: Sometimes it’s just about the cost. Some customers churn because they perceive the cost as too high for the value they receive. Flexible pricing plans, loyalty discounts, or value-added features can help mitigate this issue. 
5. Competitor alternatives: And lastly, if a competitor offers a more attractive package, whether it’s better pricing, features, or customer service, customers may leave. Businesses need to continuously evolve, emphasize their unique value propositions, and build strong relationships with customers to stay competitive. 

Now that you understand the primary drivers of churn, let's explore proven strategies to address each of these challenges head-on.

How to reduce customer churn: 13 actionable Strategies 

Reducing customer churn requires a proactive and intentional approach. To truly keep customers engaged and loyal, businesses must implement targeted strategies that focus on building stronger relationships, improving the customer experience, and using data to predict and prevent churn before it happens. 

In this section, we’ll dive into 13 actionable strategies that will help you tackle churn head-on and retain your valuable customers. 

Strategy 1: Identify at-risk customers early

Churn isn't something you should wait for. There are ways to spot it early. For example, early warning signs of churn include decreased product usage, fewer logins, and negative customer feedback. Churn prediction models, customer health scores, and churn risk assessments can help businesses proactively identify at-risk customers. By tracking user behavior and engagement metrics, companies can intervene before customers decide to leave.

Customer health scores aggregate multiple data points into a single metric that indicates account stability. These scores typically incorporate product usage frequency, feature adoption rates, support ticket volume and sentiment, payment history, and engagement with success resources. When health scores drop below certain thresholds, automated playbooks can trigger personalized outreach from customer success teams.

Outreach's Deal Agent enhances this proactive approach by automatically surfacing deal health insights from your sales conversations. Using conversation intelligence, Deal Agent analyzes calls and meetings to detect critical signals, such as changing buyer sentiment, emerging objections, or shifts in decision criteria, that may indicate an account is at risk. By keeping your pipeline data accurate and highlighting deals that need attention, Deal Agent helps revenue teams identify and address potential churn before it happens.

Leading organizations assign risk levels to accounts based on health scores, then create differentiated response strategies. High-risk accounts receive immediate attention from senior team members, while medium-risk accounts enter automated nurture sequences. This tiered approach ensures your team focuses energy where it matters most.

Strategy 2: Improve your onboarding experience  

It might be a cliche, but it's true when it comes to retention: first impressions matter. A strong onboarding experience can set the tone for a lasting customer relationship. Businesses should focus on making the onboarding process as seamless and engaging as possible. Send clear and informative welcome emails, offer interactive product walkthroughs, and provide dedicated onboarding support. Additionally, businesses can use AI-driven onboarding tools to tailor the experience based on customer needs, ensuring each user gets the most relevant guidance. 

Strategy 3: Define and prioritize your most valuable customers

Not all churn carries the same weight. Losing a low-engagement user is fundamentally different from losing a high-value enterprise account that drives significant recurring revenue. Yet many businesses treat every customer the same when it comes to retention efforts.

Research shows that just 20% of your customers account for 80% of your future revenue. To reduce churn effectively, you need to identify which customers matter most and allocate retention resources accordingly.

Start by segmenting customers based on multiple factors:

• Revenue contribution. Which accounts generate the most monthly recurring revenue or have the highest lifetime value?
• Growth potential. Which customers have room to expand their usage or upgrade to higher-tier plans?
• Engagement levels. Which customers actively use your product and demonstrate strong adoption of key features?
• Strategic value. Which customers serve as industry references, provide valuable feedback, or influence buying decisions for similar prospects?

Once you have defined your high-value segments, create differentiated retention strategies. These customers should receive priority support, exclusive access to new features, dedicated success managers, and proactive outreach at the first sign of disengagement. 

With Outreach's retain-and-expand features, you can arm account teams with insights that help reduce churn and drive expansion for your most valuable customers. By focusing retention efforts where they drive the biggest impact, you protect the revenue that matters most to sustainable growth.

Strategy 4: Personalize your engagement

Customers don’t just want to feel like another name on a list – they want experiences that actually resonate with them. Personalized emails significantly improve response rates. In fact, personalized email outreach results in 29% higher open rates and 41% higher click-through rates, making personalization an essential strategy for improving engagement and conversion. 

AI-powered product suggestions, proactive customer success check-ins, and behavior-triggered messaging can all help deepen engagement and make customers feel valued. For example, Outreach’s AI Prospecting Agent enhances personalized outreach by delivering relevant communication based on deep account research, ensuring that every interaction feels thoughtful and tailored.  

Strategy 5: Collect and act on customer feedback 

Customer feedback is invaluable for understanding pain points and making necessary improvements. Businesses should actively collect feedback through NPS surveys, CSAT scores, and direct customer interviews. Once that data is collected, companies that actually make changes based on customer input show they care. 

When businesses respond to feedback by improving products, refining support, or tweaking pricing, customers take notice. That kind of responsiveness makes all the difference in reducing churn and turning customers into long-term advocates. 

Strategy 6: Strengthen your customer support

Since lack of customer support is one of the leading causes of customer churn, strengthening this area should be a top priority. Providing top-tier customer support is a non-negotiable for reducing churn. Customers expect quick, effective support, and when they don’t get it, they’re more likely to walk away. That’s why investing in faster response times, 24/7 live chat, and easy-to-access self-service resources like knowledge bases, such as Outreach University, and FAQs is a must.  

Strategy 7: Offer flexible pricing and incentives 

As mentioned earlier, price is often a key factor in churn, and businesses need to be flexible in their approach. Offering tiered pricing structures, personalized discount plans, or long-term subscription incentives can encourage customers to stay. Many companies can successfully reduce churn by providing loyalty programs or exclusive benefits for long-term customers. 

Strategy 8: Build a strong community

Community is everything for a business looking to retain customers. A strong community fosters loyalty and long-term customer relationships. Companies can create exclusive customer groups, forums, and networking events to encourage engagement. Outreach does this by hosting customer webinars, such as the What’s New, What’s Next series, where users can explore new features, share best practices, and learn from industry leaders. These interactive forums help customers stay connected with the brand while offering valuable insights into improving their engagement and usage. 

Strategy 9: Highlight your competitive advantages

Keeping an eye on the competition is critical. Companies should consistently highlight their unique value propositions, provide features that competitors lack, and proactively reach out to customers who may be considering a switch.

Strategy 10: Use AI to predict and reduce churn 

Churn prevention? There’s an AI for that! An AI sales tool can predict and reduce churn by identifying at-risk customers before they leave. With Outreach’s Sales AI platform, sales teams can stop wasting time on repetitive tasks and focus on making smarter decisions that improve retention. 

Here’s how AI can help: 

According to McKinsey research, companies using predictive analytics reduce churn by up to 15%. The key is moving from reactive to proactive retention strategies.

Modern AI tools analyze hundreds of behavioral signals to identify at-risk customers before they disengage. These signals include declining product usage, decreased email engagement, support ticket patterns, and changes in key feature adoption. When multiple negative indicators appear simultaneously, AI systems can automatically trigger retention workflows tailored to each customer's specific situation.

• Automated renewal reminders: Set it and forget it – AI sends reminders to customers about renewals, ensuring no one slips through the cracks. 
• Predictive analytics for at-risk customers: AI analyzes customer behavior and identifies those who are most likely to churn, allowing you to intervene before they leave. 
• Personalized retention offers: AI helps craft tailored retention offers, so customers feel valued and engaged with your brand. 

With these AI-powered tools, businesses can proactively tackle churn and improve retention. 

Strategy 11: Win back churned customers

Not all churned customers are gone forever – sometimes, they just need a little nudge to come back. Win-back strategies, like targeted re-engagement emails and exclusive discounts for returning customers, can help reignite interest and strengthen relationships. With the right approach, many churned customers can be successfully won back, boosting loyalty and revenue. 

Before attempting to win back campaigns, conduct thorough exit interviews to understand why customers left. Only 1 in 26 unhappy customers actually complain, meaning 91% who churn leave silently. Exit interviews uncover the real reasons behind voluntary churn, whether product limitations, pricing misalignment, or competitive advantages you did not know existed.

Make calling churned customers part of your standard offboarding process. These conversations serve two purposes: they provide invaluable feedback for improving your product and customer experience, and they leave the door open for future re-engagement. Customers who feel heard, even in departure, are far more likely to return when circumstances change.

Strategy 12: Prevent involuntary churn with dunning management

Many businesses focus exclusively on voluntary churn while ignoring a silent revenue killer that is entirely preventable. Involuntary churn due to failed payment accounts for up to 40% of total customer loss, yet most companies lack a systematic approach to recover these customers.

A dunning strategy is an automated communication system that reaches out to customers when payments fail, giving them multiple opportunities to update their billing information before cancellation. Research shows that dunning campaigns recover 42% of failed payments through email alone, and comprehensive dunning systems can achieve recovery rates as high as 70%.

Here's how to build an effective dunning process:

• Set up automated card retry logic. Payment processors should automatically retry failed payments at optimized times before involving the customer. Many payment issues are temporary, and intelligent retry systems can resolve them without customer intervention.
• Create a dunning email sequence. Rather than a single notification, send a series of 3 to 5 emails at strategic intervals. The first email should go out immediately after payment failure, with follow-ups spaced across several days. Each message should escalate urgency while maintaining your brand's empathetic tone.
• Use account updaters. Account updater services automatically check customer card details with issuing banks before renewals, updating expired or replaced cards without customer action. Companies using account updaters see 2 to 5 times improvement in recovery rates.
• Implement pre-dunning notifications. Alert customers 30 days before their card expires, giving them time to update information before any service disruption occurs. This proactive approach prevents churn before it happens.

By addressing involuntary churn systematically, you capture revenue that would otherwise slip through the cracks, all while improving the customer experience.

Strategy 13: Offer long-term contracts strategically

Want customers to commit for the long haul? Give them compelling reasons to do so. Long-term contracts are not just about locking in revenue; they are about reinforcing value and building confidence in your partnership.

Companies with longer average contract terms experience 30 to 50% lower churn rates. Why? Because commitment correlates with confidence. When customers sign annual or multi-year agreements, they have already decided your solution is worth the investment.

The key is timing. Offering long-term deals too early can backfire. The right moment is after customers have experienced clear value and success with your product. Use these approaches:

• Create mutual value. Offer meaningful discounts or additional features in exchange for longer commitments, making the decision financially attractive.
• Provide planning certainty. Help customers lock in predictable costs for their annual budgets, especially valuable in uncertain economic conditions.
• Include flexibility. Build in options to adjust seat counts or features mid-contract, reducing the perceived risk of long-term commitment.

Outreach's AI Prospecting Agent helps sales teams identify the perfect timing for these conversations by analyzing engagement signals and account health indicators.

How reducing churn captures low-hanging revenue 

It’s clear that retention isn’t just about keeping customers – it’s about tapping into low-hanging revenue. After all, once you’ve invested in acquiring a customer, it’s much more cost-effective to nurture and retain them than to start the acquisition process all over again. By focusing on retention, businesses are driving revenue with minimal additional investment. When you reduce churn, you’re unlocking the potential of your existing customer base without needing to spend extra on new customer acquisitions. 

Moving forward, the companies that win will be those that treat retention as a revenue strategy, not just a customer service function. By combining proactive engagement, AI-powered insights, and systematic approaches to both voluntary and involuntary churn, you can transform retention into a competitive advantage.

Discover how Outreach's AI Revenue Workflow Platform can help you identify at-risk customers and automate retention workflows.

FAQs about reducing customer churn 

What is a good customer churn rate? 

The “acceptable” churn rate varies significantly by industry. For SaaS companies, a good target is typically less than 5% churn per month, while in e-commerce, churn rates can be higher, ranging from 20 to 30%. Ultimately, the key is to measure your churn rate consistently, understand what’s driving it, and continuously improve over time. Regularly analyzing this data allows you to make informed decisions and reduce churn more effectively. 

How long does it take to see results from churn reduction efforts? 

The timeline for seeing results depends on the specific strategies you implement. Short-term actions, like improving onboarding processes or launching targeted outreach campaigns, can show results in a few weeks to months. However, long-term initiatives, such as adjusting pricing or building a strong community, may take several months to a year to fully impact churn. Regardless of the strategy, tracking your retention metrics regularly and refining your approach is essential for long-term success. 

What is involuntary churn, and how do I prevent it?

Involuntary churn occurs when customers unintentionally cancel due to payment failures, expired credit cards, or billing issues. This type of churn accounts for 20 to 40% of total customer loss but is highly preventable. To reduce involuntary churn, implement automated dunning email sequences that alert customers about payment failures, use account updater services to automatically refresh expired card information, and set up intelligent payment retry logic. 

Research shows that comprehensive dunning strategies can recover up to 70% of failed payments. Unlike voluntary churn, which requires product improvements, involuntary churn is solved through better payment infrastructure and communication.

How can AI help predict and prevent customer churn?

AI-powered churn prediction analyzes hundreds of behavioral signals to identify at-risk customers before they disengage. Companies using predictive analytics reduce churn by up to 15%. Modern AI tools track declining product usage, decreased email engagement, support ticket patterns, and changes in feature adoption. 

When multiple negative indicators appear simultaneously, AI systems automatically trigger personalized retention workflows. Outreach's AI capabilities include Deal Health scores that predict account risk, automated engagement triggers based on customer behavior, and conversation intelligence that surfaces sentiment changes in customer communications. The key advantage is moving from reactive churn management to proactive prevention, allowing your team to intervene with targeted strategies before customers decide to leave.

What is the difference between customer churn rate and revenue churn rate?

Customer churn rate (also called logo churn) measures the percentage of customers who leave, while revenue churn rate measures the dollar amount of revenue lost. These metrics tell different stories about your business's health. For example, losing ten small accounts with $100 monthly subscriptions results in 10 logo churns but only $1,000 revenue churn. Losing one enterprise account with $10,000 monthly recurring revenue results in just one logo churn but $10,000 revenue churn. 

Most SaaS businesses should track both metrics, but revenue churn often matters more for understanding true business impact. You can also calculate Net Revenue Retention (NRR), which accounts for both churn and expansion revenue. A negative revenue churn rate (NRR above 100%) means your expansion revenue from existing customers exceeds losses from churned accounts, indicating very healthy growth.

How can I measure the success of my churn reduction efforts? 

To track the effectiveness of your churn-reduction initiatives, there are a few key metrics to monitor: 

• Churn rate: Measure churn before and after implementing retention strategies to assess improvement. 
• Customer retention rate: The percentage of customers who stay over a given period. 
• Customer lifetime value (LTV): The total value a customer brings to your business over their lifetime, which increases as churn decreases. 
• Net Promoter Score (NPS) or customer satisfaction scores: These metrics help gauge overall customer satisfaction and their likelihood of remaining loyal to your brand. 

In addition to tracking these metrics, A/B testing different retention strategies will give you insights into what works best for your audience.