Using Verified Emails to reduce Customer Churn Rate


Using verified emails to reduce customer churn rate


Did you know that when you use verified emails for your email marketing campaigns, you can drastically reduce your customer churn rate?


Churn represents your most strongest arch rival. Between retaining existing customers and acquiring new ones, the former is lot less costly. Why would you want to exhaust your resources in just acquiring new ones and paying no heed to ‘retaining’ your existing customers? That sounds unfair to your business!

What is Customer Churn Rate?


Customer churn rate refers to the number of customers lost during a specific time span. Many assume it is about acquiring new customers, but sadly, it is just the opposite of that.

How do I calculate customer churn rate?


It is not a complicated formula. Rather the most straightforward way to calculate it is:

(Total no. of customers who left / Total no. of customers in the starting) x 100.


For instance, if you had 300 customers in the starting of the quarter, and 9 customers left by the end of that quarter, your customer churn rate for that quarter is :


(9/300) x 100 = 3%


Calculating customer churn rate in percentage is the most simplest way to do this. However, if you want, you can also calculate it based on the recurring loss value for your business or opt to calculate by the number of customers lost.


This calculate pattern works best for a B2B business. However, for an eCommerce brand (which is a B2C business), calculate customer churn rate can be tricky. This is because the buying cycle in a B2C business is not typically long as compared to that of a B2B brand. Many customers make repeated purchases within one quarter. Hence, calculating a fixed percentage can be dicey. However, one possible way to figure out churn rate is by marking those customers as ‘churned’ who did not make a single purchase within that particular quarter.


Till now, calculating customer churn rate looks simple. However, it does have its own set of challenges.


Challenge: Many marketers end up mixing revenue churn rate with customer churn rate. They are DIFFERENT. Let’s see why/how.


Suppose company ABC has two product lines – basic and premium. This company has about 5,000 customers who pay $100/month each for the basic membership. Thus, the total value comes to:


5,000 X $100 – $5,00,000 MRR


Similarly, about 200 customers are signed up with the premium membership and pays $250/month each. The total value here is:


200 x $250 = $50,000 MRR


Putting all the values together, company ABC has 5,200 customers and total value of $5,50,000 MRR.


Let’s say about 50 basic and 20 premium customers churn in one month’s time. The customer churn rate becomes:


{(50+20)/5200} x 100 = 1.35%


Revenue churn rate becomes:


[({50 x $100} + {20 x $250})/ 5,50,000] x 100 = 1.82%


As you can now see, the values are different. Revenue churn rate and customer churn rate can never be equal is this case because there are two kinds of memberships with different values. This discrepancy will continue to increase as a company keeps introducing more pricing plans.


To make things more transparent:


Revenue Churn Rate: helps in analysing the overall brand performance and the revenue status.


Customer Churn Rate: helps in retaining existing customers and re-engage with them.


Factors that cause increase in customer churn rate


You are already familiar with the famous saying that 20 percent of your existing customers contribute to 80 percent of your total revenue. This makes it more clear why high customer churn rate is a nightmare for any company. There are various factors that contribute to increase in customer churn rate.


If you are game for numbers, here are few statistics on factors contributing to increase in customer churn rate (by Preact Poll):


  • 23% increase due to poor onboarding
  • 20% increase due to underperforming product

Some other notes reasons are:


  • Misleading information that causes your customers to get disappointed. When you are not giving information that you promised to deliver when they signed up or subscribed, you are turning them off step by step.
  • High subscription costs can be another major turn off for your customers. If you are charging your customers more than the industry standards, you are almost handing over a sign to “leave and use other products”. Believe it or not, there is so much competition already. If your customers are leaving your product due to high price, they are also no-way coming back.
  • Lack of customer engagement is another crucial factor. If you take your customers to be granted and stop engaging them, even they will get bored with your product. Soon enough, you will be receiving ample ‘cancellation’ requests because your customers found nothing interesting to put up with you.
  • Failed payment gateways can instantly spike up your churn rate. Let’ say you have great pricing plans and compact features to offer. Your customers gets delighted and choose to upgrade to your paid plans. While everything sounds great and they are all set to onboard, they start facing repeated payment failures. They will attempt for one or two times, and then they will take a detour. No one wants to make transactions in such situations!


The biggest mistake any brand can make is to give your competitors scope to poach your own customers with insightful information. What you should be doing, is done by your competitors. And before you know, your customer churn rate has already hit the sky. Before your customers start even remotely considering your competitors, it’s time to take actions. Did you know you could bring down your customer churn rate with emails? Yes, you read it right.


Using verified emails to reduce customer churn rate


BareMetrics, a subscription insights and analytics tool, had penned down 17 emails that they sent to their customers to reduce their churn rate. It not only increased their engagement but also spiked up their revenue. They had an onboarding email series spread across 14 days including follow up emails and in-app interactions.


Emails are the most preferred communication channel for any and every business. Over the time, emails have become highly personalized and instil a one-to-one relationship building. Your emails not just speak for your brand, but also serves to engage your customers with relevant content.


Before you start launching email campaigns or worry about segmentation, you must be sure that you have verified email lists. If your email list has dormant emails or spam email IDs, then that can hurt your email reputation in the long run. If you don’t know where to begin with, you can start with Find That Email where analytics is put into action to deliver verified emails only.


Step 1: Create a clean email list for your email campaigns to show results.

Using emails to reduce churn rate

Now that you have a clean email list, here are some email campaigns that can help in reducing churn rate.

Personalized emails for better relationship building


You have read this multiple times about sending personalized emails to establish a relationship with your customers.


Groove, a saas startup was experiencing customer churn rate of 4.5% consistently. Despite having a steady inflow of customers, their customer churn rate was not coming down. That’s when Groove decided to segment their users into a group comprising of those whose first email session was less than 2 minutes. To this group, Groove sent this email.

This helped. More than 40% users who completed the process stuck with Groove for about 30 days.


This brings us to the second to-do to reduce customer churn rate.

Segment your customers properly


If Groove did not segment their customers so minutely, they wouldn’t have seen such starking results. To keep your customers engaged and glued to your brand, you need to implement behaviour-based dynamic segmentation. Based on how your customers are behaving, their demographics and firmographics, and their buyer’s stage, you must have them grouped. Only then can you design relevant and targeted emails that will not let your customers get disappointed.


You can send educational content to keep your customers engaged. For instance, those customers who are still exploring your product or are yet to upgrade to a paid plan, you can send them more educational content to keep them glued to your brand. For instance, this email from LeadFuze:


LeadFuze quickly gives a handy resource urging you to engage with them ASAP.

Reminder emails and re-engagement emails


When you take the extra effort to remind your customers about an account expiry prior to the expiry date, you show a genuine concern for your customers. Your customers want to be attended and taken care of (not literally). Check this email from Dollar Shave Club. This email will hit your inbox if you skip filling up your credit card information while signing up. The subject line, the content and the image- all look enticing and promising; good enough to trigger an engagement.


Feedback emails


Asking for feedback is another genuine way to get your customers to work! This email from Groove does the trick:


  1. It urges for feedback incase something went wrong
  2. The links helps in tracking the customer behaviour and in turn trigger more personalised emails.


You can say, an automated email workflow with behavioural triggers is already created and launched.

If you have used Dropbox, you are aware of their ‘refer to a friend and get more storage’ technique. Dropbox had 4 million users in 15 months after implementing this referral program.

When you offer something valuable to your customers and ask them to do something to avail that offer, in most cases your majority customers will do that. It is more like playing mind games.


You can use emails to


  • Announce new updates
  • Congratulate on achieving a milestone (however small that is)
  • Say thank you for choosing your brand and being associated for so long
  • Wishing on special occasions and offering exclusive offers
  • Knowing why your customers left


There are two major takeaways


  • Use only verified emails. Using spam emails can hurt your email reputation.


  • Send personalized and targeted emails only. Your customers expect relevant emails from you.


Did you use emails to reduce your customer churn rate? What is your email story? Do you agree that emails can help in reducing customer churn rates? Share your views and opinions. After all, it’s good to keep learning more.  


Author: Ankit Prakash

Bio: Ankit is a technology entrepreneur at Aritic – full stack automation software platform for digital business at Aritic with Marketing Automation, sales CRM, Transactional Mail and Desk.

Ankit also spends a majority of his time reviewing various marketing tools and platforms on his marketing blog- Sprout24. Follow Ankit on Twitter at @ankitpr89