Customer 360
January 20, 2021


If you are a business owner, one metric you hate calculating is the “Customer churn rate“, but we all know it’s important. Retaining customers is not a costly affair like acquiring customers and the first step towards retaining customers is to understand why we lose a few of them.

The customers may be happy with your service one day and will switch to your competitors the next day. You never know until you start tracking.

“Growth is not convoluted or magical. It’s very simple: Measure, Test, Experiment. Create a culture of experimentation and celebrate failure just as much as you celebrate success” – Chamath Palihapitiya, VC and Former VP of User Growth, Facebook

In this article, we will discuss what is Customer churn rate and how Salesforce could help predict and reduce Customer churn rate.

What is Customer Churn Rate ?

Customer churn rate in simple terms is the number of existing customers you lost over a period of time. The customers may have stopped buying the product, cancelled the subscription, etc. and switched to your competitors.

Customer Churn Rate = Number of customers lost / Total no of customers * 100

It’s quite natural for a business to lose customers and gain them later. However, the lower your customer churn rate, the better it is for your business. It’s one metric that should be taken seriously.

Why is Customer Churn Rate Important?

Customer churn rate is a very important metric for a business as it has a different impact on Revenue. If you lose a customer you lose the revenue and profit coming out of that sale.  

Also, the cost to acquire a new customer(CAC) is higher than the cost of retaining an existing customer.

Forrester Research reveals,

“Companies lose $1.6 trillion per year due to customer churn! It costs 5 times more to acquire new customers than it does to keep an existing one”

The focus for companies should primarily be on retaining existing customers, reducing the churn rate in-order to be profitable.

Predicting Churn with Salesforce

You could use Salesforce Einstein Discovery (Analytics + AI) to identify the areas of churn and necessary next steps to reduce churn. Instead of hiring a separate data scientist, you could use no code Einstein Discovery feature to go through a large amount of historic data, find important patterns and predict the next best steps.

You could have a look at customer churn prediction demo scenario by Chris Ames.

Einstein Churn Predictor
Einstein Churn Predictor

You could build a prediction model that suits your company without any code using the Einstein Prediction Builder and predict the likelihood of a customer churn.

Once you decide on what areas you would want to predict, map those into Salesforce objects and fields. If there aren’t exact fields, you have the possibility to create custom fields as well.

Once you build the predictions, you could review the results in Einstein Prediction Scorecard.

Einstein Prediction Builder
Einstein Prediction Builder

How to Reduce Churn Rate ?

Churn is a natural occurrence in business. However, preventing and reducing churn is something that every business should do.

  1. The basic step is to understand why customer churn occurs. This could be done by interviewing or surveying the lost customers
  2. The next step is to engage with customers consistently and find your valuable customers/customers who are important for your business to thrive.
  3. Find a set of customers who are likely to stop using your product/service. Once you find them, you could offer incentives to retain them
  4. Educate your customers about the product or service you are selling. If the customers don’t understand your product or not educated enough, they likely switch to a different product.
  5. Collaborate with your marketing team and understand if you are selling the product to the right customer segment.
  6. Make customer experience and service your top priority. Also, listen actively to what the customers have to say.

If customers are happy with your product or service, they tend to stay and else they leave. The above measures could be taken to keep the customers engaged and happy.

As Jeff Bezos once mentioned

“We see our customers as invited guests to a party, and we are the hosts. It’s our job every day to make every important aspect of the customer experience a little better”

As a company, you should give all reasons for customers to stay with the company and not leave them.

Salesforce role in Churn Reduction

Salesforce could help in multiple ways to prevent, reduce customer churn rate and retain customers. Following are the six major ways Salesforce system could help.

1. Customer 360

The first step towards retaining customers is to get complete and accurate customer data, all at one place. There should not be any data silos due to the fact that different teams are using different tools.

Salesforce Customer 360 Data Manager can help you gather all customer data from Salesforce/other third-party applications and present a single source of truth. The customer support team could provide the best possible solution to customer after reviewing all the information about customer from sales, marketing team, etc. thereby reducing the churn rate.

You could read this blog to further know about Customer 360.

Customer 360

2. Workflow Automation

You could automate workflows and trigger emails based on certain conditions in Salesforce. You could send emails to re-engage with the customer, offer discounts, etc when the customer is about to churn.

Also, you automate workflows so that you are in regular touch with a customer, educating them about your products/services and prevent churn.

Give a further read about Einstein Automate.

3. Personalize Communications

Once you gathered all details about the customer from various systems, you could use them to personalize emails. Salesforce Interaction Studio helps you to deliver exceptional customer experience across all channels to customers.

If you don’t want to lose a set of customers, you could segment them, understand their preferences and offer specific discounts.

4. Listen to Respond to Customers in Social Media

Social Media has become one of the major channels where customers show their frustrations with a brand/company. If companies like yours don’t respond to their tweets, posts, etc. then you are most likely going to lose them.

“Your most unhappy customers are your greatest source of learning” – Bill Gates

With Salesforce Social Studio you could listen, re-engage with customers who are most likely to churn.

5. Monitor signs of Churn

You can have an eye on the customer’s last interaction, website visit, etc. If the customers are not using the product/service, hasn’t been in touch at all, they are more likely to churn.

In Salesforce, you could automate this by creating Reports/dashboards. Einstein models could also be built to predict churn as we covered previously in this blog.

6. Educate your customers

You could educate about your product/services to customers on a regular basis using campaigns. You could also use Salesforce Community cloud to manage questions, discussions, cases, etc.  

Salesforce could also help your customer support team by offering an extensive knowledge base to resolve customer queries at a faster rate.

Final Thoughts

Tracking and reducing churn rate is often neglected by businesses. They tend to focus on winning more customers than retaining the existing ones.

With an optimized Salesforce Solution by CloudIdeas, you achieve more than you ever thought was possible. Write to us and get to know more about how Salesforce could help in Customer retention.

About the author

Priya Ravichandran
Priya Ravichandran

Senior Consultant | Geeky Digital Marketer | Guest Content Writer

Priya Ravichandran is a consultant by day, content creator by night. Priya enjoys writing well-researched and easy-to-read business content. When she isn't typing or writing, she can be found backpacking or dancing.

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