Why Brands Suffer From Customer Attrition (& How to Stop It!)

Customer attrition comes at a huge cost to companies in all sectors.

Despite that, the average American company will lose up to 30% of its existing customers each year due to a lack of brand loyalty.

Keep that 30% loss in mind- because retaining an existing customer costs seven times less than acquiring a new one.

While plenty of companies are focused on acquiring brand new customers, they're overlooking one of the most important pieces of the puzzle: customer retention.

A business that focuses on customer satisfaction and long-term brand loyalty is a business that stands the test of time.

But why is there so much customer churn in the first place?

Let's cover some of the main reasons that brands lose so many customers each year.

5 Causes for a High Customer Attrition Rate

Before we can tackle the solutions, it's important to touch on why so many companies suffer from customer attrition in the first place.

Here are 5 of the most common causes of customer turnover.

1) Competitor-Based Customer Turnover

Unfortunately, unless a customer is a diehard fan of your brand, it doesn't take much to nudge them towards a competitor.

Whether through a discount, loyalty program, or a sleeker website, competitor-based turnover happens when your brand falls behind the proverbial curve.

If other brands are starting to make leaps in bounds in your industry while you stay stagnant, it's only a matter of time before competitor-based customer turnover starts to kick in.

2) Low-Quality Customer Support

Customer support is the unsung hero of customer retention and brand loyalty.

As many as 14% of customers defect because the business in question doesn't know how to handle their complaints.

Compared to those who have their complaints resolved quickly, which have a purchase intention rate of over 82%.

All of this is to say: Customer support is much more critical than many brands give it credit for. And because of that, it's a massive cause for customer attrition.

3) Straying Away from Your Brand's Values

Every successful brand has a set of values it operates by.

Take Dollar Shave Club, for instance. Here's a list of some of the main tenets of Dollar Shave Club's approach to business.

No long-term commitments, convenience, everything you need to shave delivered right to your door.

These are just some of the values that make this company unique.

Now, imagine a change in policy where Dollar Shave Club requires you to sign a year contract, or come pick your package up from a store.

If you were a long-time customer, there's a good chance you'd stop your subscription on the spot.

While it's essential to adapt your approach and change with the times, all-too-often brands forget what their main values are and move away from that.

If your business falls victim to this, you're likely to see a large increase in customer attrition.

4) A Lack of Post-Purchase Care

Once someone makes a purchase from your brand, the customer journey isn't over.

In fact, the post-purchase phase of the customer journey is where you continue to nurture each customer into a loyal brand follower.

Content marketing, VIP offers, and post-purchase product support are all necessities if you want customers to stay with your brand.

5) Failing to Collect Consumer Feedback (and/or Not Acting on It)

Running a successful business is, in large part, about data.

And some of the best data available is the feedback you get from your customers.

Without knowing what your customer base wants and doesn't want, it's nigh impossible to consistently make changes they're in favor of. And the only way to collect that data is by asking for customer feedback, reading reviews online, and engaging with your followers.

Operating on a "we know best" basis is a common downfall for brands in many industries.

How to Reduce Customer Attrition & Increase Retention for Your Own Brand

Now that we've covered how to fight customer attrition, let's cover some ways your brand can increase retention.

1) Ask Customers to Create an Account

One of the easiest ways to reduce customer attrition for your ecommerce business is to ask customers to create an account in your store.

Customer accounts make it easier for shoppers to make more purchases because they contain all the customers’ shipping and billing details. Customers who have registered accounts are also more likely to repurchase.

However, since a large number of shoppers don’t enjoy creating an account during their first purchase, always allow customers to checkout without an account.

Instead, allow them to opt into account creation via your thank you page or an automated email.

To increase your signup rate, it's always a good idea to offer incentives. Offer exclusive discounts or other perks for shoppers who create an account.

2) Offer Excellent Customer Support

In general, happy customers are retained customers.

One of the best ways to keep them happy is to ensure that you offer excellent customer support.

It’s been shown that customers are four times more likely to switch over to a competitor if they’re not satisfied with the experience they’ve had with a brand’s customer support service.

Which is why it's crucial for ecommerce businesses to work on providing the best customer support possible.

Start by making it easy for customers to get the help they need by offering them a variety of ways of reaching you, including email, call widget, social media, and live chat.

And always respond to customers’ questions, concerns, and issues in a timely manner.

This is especially important when it comes to your social media accounts; as much as 88% of shoppers state they avoid buying from brands that have unanswered complaints on their social media pages.

Listen to customer feedback and suggestions, and implement changes they'd love.

This will let customers know that you value their opinion, which does wonders for brand loyalty and retention.

3) Nurture Customers through Email Sequences

The process of nurturing your customers doesn’t stop after they make a purchase.

You need to design a nurturing strategy that will allow you to keep building a deeper relationship with your customers.

Email is one of the best mediums for staying in touch and at top-of-mind.

There are plenty of different emails that ecommerce businesses can use to keep nurturing their customers:

Welcome emails

The welcome email is the first non-transactional email a customer will receive from your brand, so it’s important that it makes a good impression.

Let customers know more about your brand and the way you do business. Give them an insight into what kind of emails they’ll be receiving from you in the future.

Abandoned cart emails

As much as 69.57% of all online shopping carts are abandoned.

So it'd be a waste to let them all slip through the cracks. Abandoned cart emails help to reduce the losses from carts by gently reminding customers about them.

Use the abandoned cart email to remind customers what they left behind and see if you can do anything to help them complete their purchase.

Re-engagement emails

Sometimes, all it takes is a small nudge to customers back to shopping in your store.

Send re-engagement emails to customers who haven’t purchased anything from you in a while and ask if there’s something that might be holding them back from making a purchase.

You could even give them an attractive discount to build some excitement about returning.

Product recommendation emails

Most shoppers enjoy product recommendations when they’re actually relevant to them.

Email customers about products they might enjoy based on their previous purchases to help them discover new products in your store that might benefit them.

This will allow you to delight your customers as well as generate additional revenue through email upsells and cross-sells.

Holiday emails

Sending customers an email wishing them happy holidays is a great way to show that you care and think about them.

Holiday emails, like Black Friday or Christmas discounts help to keep your brand top of mind and boost customer loyalty. They can also get customers back to shopping.

4) Build a Community

Another great way to reduce customer attrition and improve retention is to build a community around your brand.

This will help to make your customers feel that their purchase isn’t just about getting a product, but rather about joining a group of like-minded people.

Your brand’s community can gather on your social media pages or a dedicated discussion board on your website.

Encourage customers to share advice, help each other out, and discuss topics that interest them.

Starting a community and getting the first batch of members to actively participate is always the hardest part.

One way you can get the ball rolling is to reward your most active community members with free products or discounts. This would give people an incentive to participate more actively and help your community grow.

Once customers become active participants in your community, it’ll be hard for them to imagine shopping anywhere else.

5) Improve Your Return Policy

As many as 63% of online shoppers check a website’s return policy before making a purchase.

Your return policy can make the difference between shoppers buying from you or going over to a competitor.

It also increases the chance that they make repeat purchases with your brand.

As many as 48% of shoppers say they'd buy more frequently if online retailers offered an easy way to return products.

Offering a friendly return policy will make your customers happier and more likely to stay with you for longer.

Remember to keep your return policy short and easy to understand, and provide customers with different ways to return items.

Strive to create an effortless return experience for your customers, and you’ll be able to improve customer loyalty, boost repeat purchases, and increase retention rate substantially.

6) Personalize the Shopping Experience

Ecommerce giants such as Amazon have accustomed shoppers to a personalized approach to shopping. People have started to expect a personalized shopping experience from brands.

As much as 82% of shoppers say that they would make more purchases from brands that send out personalized marketing messages.

If you want to retain your customers, you need to work on creating a personalized experience for them.

Use personalization on your website, through email, and on your social media pages.

Personalization can be based on a variety of factors, including customer location, purchase history, gender, and age.

7) Surprise Your Customers

Most people enjoy pleasant surprises.

The same is true for your customers.

Putting in the effort to do something out of the ordinary for your customers is a great way to boost brand loyalty and improve retention.

One of the simplest and most affordable surprises you can give your customers is to include a nice, handwritten note with their package.

This will show them that you value each and every one of your customers and are willing to take the time to thank them personally.

Another welcome surprise? Free samples with every order.

Apart from delighting your customers, this will also give them a chance to try out some of your other products, which might result in them making another purchase.

Since 65% of consumers who receive gifts from brands share the experience online, it’s also a great way to gain more exposure for your business.

8) Implement a Subscription-Based Pricing Model

Offering a monthly subscription for your products or services is a great way to ensure that customers stay around for a while.

Monthly product subscriptions are popular with consumers as well, which can be seen in the popularity of subscription box services such as the previously mentioned Dollar Shave Club.

A subscription-based pricing model works exceptionally well for ecommerce businesses that sell consumables such as food, supplements, beauty products, or office supplies.

If you don’t sell products that are suitable for being purchased as a subscription, consider offering add-on services such as support or insurance that could be packaged as a subscription.

Apart from helping you combat customer attrition, implementing product subscriptions also allows you to predict revenue more accurately.

Are You Working to Reduce Customer Attrition?

Is reducing customer attrition one of the main focus points for your ecommerce business?

If it isn’t, you might want to bump it up on the priority list.

And if this guide helped, make sure to check out the other content on our blog.

And leave a comment below if you think we missed something, we'd love to hear from you!