How to Identify Silent Churn in Your Small Business
Running a small business is hard work. There’s so much to look after, so much to sign off on, so much to keep track of each and every day. Unfortunately, losing customers comes with the territory. You aren’t going to be for everyone all the time. That’s okay, but understanding why someone leaves can help you make adjustments if needed and avoid losing customers for the same reasons again later on. Losing a customer doesn’t always come with warning signs. When a customer just quietly disengages, it’s called silent churn—and it can make a real difference in your bottom line over time.
Understanding what silent churn is, why it’s a problem, how to spot it, and how to address it can change so much for your business. Here, we’re diving into the topic.
What Is Silent Churn?
Silent churn is what happens when a customer or client gradually (and quietly) disengages from your business without ever formally terminating the relationship. So that means that they may still be on your email list, have an account in good standing, or even continue paying fees, but they aren’t using your service or interacting with your offerings.
Silent churn is such a big risk—especially for small businesses—because these kinds of customers are at a much higher risk of formally leaving. That’s why it’s so important to pay attention to customer behavior and do what you can to win them back before it’s too late.
Why Silent Churn is Such A Big Problem
Silent churn needs to be dealt with, but it can be tricky because it’s sometimes difficult to spot. Here’s why it’s such a big problem—and might be a real threat to your business:
1. Your revenue will still look stable (until it doesn’t)
When you’re experiencing silent churn, those customers are often still paying any associated fees, so your monthly recurring revenue (MRR) or other revenue measures can look stable and normal. Once the customer makes a permanent break, however, you’ll notice the drop (and then it’s too late).
2. It can mess with your customer insights and metrics
Because these clients haven’t left permanently and are still hanging out in your group of active users, it can skew any kinds of metrics or measurements you’re getting. Things like engagement rates, interactions, product feedback, and more can all end up being off because some of your customers aren’t actually interacting with your product.
3. You might miss re-engagement opportunities
If you’re dealing with silent churn, the best-case scenario is that you’ll be able to re-engage the client and turn them back into an active customer. But if you’re not tracking silent churn, you won’t be able to tell who is at risk until it’s too late.
4. It hurts long-term growth
The key to sustainable growth and a scalable business is retention. If you can’t retain clients and are dealing with lots of silent churn, your growth metrics will stagnate and it’ll feel like you’re working hard to get nowhere at all.
5. It can make you look bad
For solopreneurs and small businesses, reputation means a lot. But when people stop engaging with your business, they’re usually not super happy with your services. If they end up leaving, you run the risk that they’ll stop referring you to others looking for similar services or—worst case scenario with especially unhappy customers—share negative reviews on social media or other online platforms.
What to Do After Taking Note of Silent Churn
When you start to recognize that there’s some element of silent churn amongst your customers, you’re going to want to do something about it. The best re-engagement strategies will vary based on client preferences, what it is that your business does, and more, but here are some of our favorite retention efforts:
Personalized campaigns
Sending out a personalized “we miss you” campaign can help nudge customers to re-engage with your product or service. It can also help if you include a short survey, offer free resources, or offer a discount or another bonus to perk their interest.
Incentives and discounts
Everyone is trying to save what money they can, so sometimes you can retain the client just by offering an incentive or discount. This is an especially good idea if it doesn’t really cost your business much (if anything) to do that. Special offers can make a big difference when it comes to customer engagement.
Ask for customer feedback
This is something that SaaS companies and start-ups do really well. Though you don’t know for sure if this will work for every customer, if you can convince them to be honest with you about why they’re not engaging, you might be able to address any issues and make the user experience better for all involved. Ask specific questions to help you get to the root cause of any potential issues. Negative feedback can be really useful feedback.
Retarget your users
Understanding your users is so important if you want to boost retention and lower your monthly churn. You can use your CRM, email marketing platform, or another tool to create a “silent churn” segment and create content that’s specifically tailored to that group.
Make the onboarding process better
Sloppy onboarding processes can make things worse, not better. You want to make sure that any new users, existing customers, or even prospective clients understand how to interact with your business and the best ways to get value from your products or services. Improving your onboarding process can also make things a bit easier on your team because they won’t have to answer as many support tickets and walk customers through as many things. Your support team will thank you. It’s a real win-win.
Some of the Best Tools That Can Help You Spot Silent Churn
There are plenty of tools at your disposal that can help you notice and track silent churn—and give you valuable insights about your customer base. No hidden silent churn on your watch. Here are some of our favorite tools that can help you keep an eye on the customer experience, track and measure engagement and other metrics, and work to win back your disengaged customers.
Mixpanel, Amplitude, and Other Behavior Analytics Tools
Mixpanel and Amplitude are really great product and user analytics tools. These tools help you see how people interact with your website, app, or product (you can even look at things in real time).
Track certain actions (like when they last logged in), take a look at which features seem less popular (or which features people stop interacting with first), create user groups so that you can re-target them with more specific messaging, visualize funnels to help you determine where people are dropping off in their journey (Are new customers finishing the onboarding process? Are they completing the checkout process?), and monitor how new retention tactics are working—or not.
Klaviyo, Mailchimp, Flodesk, and Other Email Marketing Tools
Email marketing platforms help you stay in touch with your audience. You can send automated flows, promotional emails, newsletters, onboarding emails, and more. They’re great for ringing alarms on low open and click rates (which can help you identify at-risk customers), sending re-engagement emails, building highly curated and customized segments to target your messaging accordingly, and more.
Klaviyo is especially great for e-commerce businesses because it’s set up so well to help you monitor purchase history.
Google Analytics and Google Search Console
This classic website analytics tool gives you tons of information about how many people are visiting your site, where they came from, what they’re doing while they’re on the site, and more.
Google Search Console is an absolute must for a look behind the curtain when it comes to SEO and what on your site is resonating with people. These tools help you visualize user flow, which help you determine where they’re dropping off, take note of returning customers, keep an eye on what people are doing on your site, and more.
HubSpot, ActiveCampaign, and Other CRM Tools
Customer Relationship Management (CRM) tools with plenty of marketing automation features are a must for anyone who is trying to manage silent churn. These kinds of tools centralize your customer data, which means you can see more of their interactions in one spot (the emails they open, the purchases they’ve made, and more), they can send automated win-back flows (emails, texts, reminders and notifications, and more), and so much more.
These tools are so useful, from solopreneurs to large corporate teams, so they can be a great choice if you’re looking for something that will scale and grow with you.
Baremetrics, ProfitWell, and Other Subscription Analytics Tools
These tools are best for SaaS businesses and others using subscription models. They turn revenue data into insights that you can use to help boost retention and minimize churn.
They’ll break things down into monthly, annual, voluntary, and involuntary churn, allow you to quickly and easily track your MRR, monitor customer cohorts over time to see how long different groups of customers stay, and help you recover failed payments.
FAQs
In which industries is silent churn the most common?
Though most kinds of companies and businesses can experience silent churn to some extent, it is more popular in some industries than in others. If you run a SaaS company, offer subscription-based services, or focus on membership programs, you definitely want to understand the ins and outs of what silent churn is, why it’s so bad, how to spot it, and what to do about it when you see it.
How are active churn and silent churn different?
Both traditional churn and silent churn can hurt your business, but traditional churn is very obvious, while silent churn is much more subtle. With traditional churn, a customer either actively cancels their relationship with your business or stops buying from you. Silent churn is harder to spot specifically because they might still be a user, they just stop engaging with you without formally canceling anything. Understanding how to stop both kinds of churn (or, at least, minimize it) can make a huge difference to your bottom line.
When and how often should I look for silent churn in my business?
You want to make sure you’re monitoring for churn on a regular basis. Consult a churn analysis to see what's going on. For most businesses, taking a look at things monthly should be a good place to start, but if you run a SaaS business or membership-based business, go for weekly monitoring. It’ll help you spot any early red flags before they turn into bigger problems and you'll be able to take corrective action to address a customer's needs.
Can I reverse silent churn before it becomes permanent?
You sure can! Address any issues, create personalized messaging, offer something special (like a discount or incentive), and remind your customers of just how valuable you are. It’s not too late to win them back and it's always best to take a proactive approach.
What’s the best way to reduce silent churn?
Make sure you start strong with a clear, communicative website, easy and accessible onboarding, personalized engagement, clear value prop, and regular, consistent check-ins with your customers. You want them to feel appreciated and valued (and you want to learn about any potential issues before it’s too late).
Final Thoughts
Silent churn might not seem like much of a threat, but it really can make an impact. Luckily, if you know what you’re looking for and keep an eye on things, you can create smart, customer-centric strategies to turn things around.
