Diagnosing the drop off: the first step to fixing poor customer retention

Churn crisis (noun):

When unidentified issues pile up over time - until customer losses force a full scale strategic reset

Customer churn can happen to the most superior companies and among their most loyal customers. It’s not only the inevitable outcome for organisations delivering sub-standard products and services. Because it can happen at any stage of the customer experience.

You might not think your organisation has a churn crisis, but do you see any of these early warning signs:

• Reduced log-in activity?

• Declining usage or purchase of different features?

• Email click-through rates falling?

• Baskets left unfulfilled? 

• Basket sizes declining?

• Multiple attempts to update payment details?

Churn can happen in the least expected places. In some ways, customer experience is like a leaky bucket and not knowing where the issues are and what’s causing them can make the holes bigger and ultimately cause a churn crisis.

And you REALLY want to avoid a churn crisis because that’s when you have so many issues to fix that you almost have to start again. 

Finding the hole in the leaky bucket

Naturally, your first step is going to be finding the hole. This starts with your existing data.

• Profile your database into meaningful customer types: new customers, current customers, super customers, dormant but not churned customers and returning customers

  • Having this clear, structured view of your customer base will be the starting point to guide your next steps; for example, a high volume of dormant not churned customers is a critical early warning and understanding what’s changed will be a critical focus for re-engagement efforts

• Analyse changes over time to identify risk points:

  • Using a rolling or interval-based view to observe how customers move between these segments, we can identify potential friction points, providing a clearer steer on where tailored customer insight should be directed:

    • Early churn:
      Are new users failing to convert into regulars? This could suggest issues with onboarding, expectation setting, or the first experience.

    • Mid-lifecycle churn :
      Indicates where engagement might be dropping off among once-committed users.

    • Win-backs:
      When dormant users return, it’s a clue that something re-engaged them — campaign, product update, or seasonal effect, but do you know which?

    • Declining value:
      Watch for drops in usage or spend from your top-tier customers — it could signal dissatisfaction or better alternatives elsewhere.

While this data won’t always tell you the exact cause of churn, it highlights where to investigate further to make smarter, more strategic decisions that lead to loyal customers that return.

If retention is a hot topic at your organisation and you need help investigating your customer data to help guide you on where to focus, we’re here to help.

If your data is already hot and you know where the holes are, as customer retention experts, we’d love to help you establish where to act to turn a churn problem into a retention celebration.