1. Identify the time period to measure churn (e.g., monthly, quarterly, or annually).
2. Count the number of clients or accounts lost during that period.
3. Count the number of clients or accounts still subscribed or contracted during that period.
4. Divide the number of lost clients or accounts by the number of active ones to get the churn rate.
What is a good churn rate?
Established companies can expect anywhere between “5% to 7% in annual churn and less than 1% in monthly” churn.
Early-stage startups and small to medium-sized organizations can expect a higher churn rate, between 10% and 15%.
For example, if a startup software as a service (SaaS) business starts the month with 200 clients or accounts but loses 50, it’ll have a 25% churn rate (e.g., 50/200 = 25%). Reducing churn for SaaS organizations in that situation is, therefore, critical.
As a business improves its customer satisfaction and relationships, as well as its product or service user experience, its sales team can reduce customer attrition rates.
Reducing churn rates starts with setting the right expectations during the sales process and continues with proactive customer care.
Sales teams must work with clients early in the sales process so they fully understand the product's value, pricing structure, and expected outcomes from the outset.
Meanwhile, customer care teams play a crucial role in nurturing relationships, addressing concerns early, and ensuring long-term satisfaction.
LinkedIn Sales Navigator is a relationship intelligence platform that translates high-quality, real-time, first-party online user data into dynamic insights about the client and account profiles that sales organizations care about most.
It also offers a variety of tools and services to help account reps and teams identify, research, prioritize, and build new client relationships to nurture over time. Below are some ways to use these LinkedIn relationship intelligence tools to prevent or reduce sales churn.
Prevent or reduce sales churn to boost long-term profits
Preventing and reducing customer churn helps sales organizations to achieve long-term, sustainable revenue growth.
That’s why businesses must take the time to truly understand customer needs and challenges while providing ways to keep the lines of communication open to receiving constructive feedback.
Continuously improving product features and service solutions is critical to stay competitive in the marketplace. Likewise, building and nurturing customer relationships long-term is important, as is prioritizing the most valuable customers to ensure higher recurring revenue growth.
LinkedIn Sales Navigator is a valuable tool sales teams can use to research, prioritize, and build personal client relationships over time. Sales Navigator can also notify you when a lead has recently changed jobs and highlight companies with high headcount turnover to indicate that an account might be at risk of churning.
