How Healthy is Your Customer Base?

“A bird in hand is worth 2 in the bush” aka “customers are more valuable than prospects.”

What is your strategy to prevent losing your current customers? Chances are you don’t even have one since according to Gartner, 2 out of 3 companies do not have such a strategy.

Want to know another mind-blowing Gartner stat? 80% of future revenue comes from 20% of existing customers.

Here’s one more just for fun and to drive the point home, the probability of landing a new customer is typically between 5-10% while the probability of selling more to existing customers is 60-70% according to Marketing Metrics.

Hopefully these stats shine a light on why reducing customer churn is such an important strategic exercise, especially as we move into choppy economic waters where budgets are almost certainly going to tighten up.

Below is a high-level framework we’ve put together to help you develop a strategy of your own that will improve the health of your customer base and aim to reduce churn.

Step 1: Customer Success Strategy
The first solution is to identify whether or not your organization currently has a customer success strategy and team that is focused on consistently providing value to your customers in exchange for their hard-earned dollars.

Note – customer success and customer service are two vastly different functions, both of which are needed to maintain a healthy customer base.

Step 2: Inspect Results
After you’ve inspected your strategy, it’s time to inspect its results. Do you know if your customers are planning to leave you or spend less money next billing cycle?

Inspect your customer base by requiring account managers to conduct quarterly business reviews (QBRs) with their customers – this will keep a constant pulse on their buying behaviors and potential for future spend.

Step 3: Ask Why?
Understand why customers are leaving or spending less money.

Unfortunately, the most productive and beneficial way to do that is to speak with them on a call, although that can be uncomfortable and chew up precious time.

You may be tempted to take the easy way out with an exit survey but the detail and instant feedback you receive on a call is precious data that should be used to prevent further churn in the future.

Step 4: Proactive Engagement
With 70% of customers stating the reason they left a company is their belief that the company does not care about them, it is imperative to show your customers that you care.

Proactively engaging with your customer base will go a long way in preventing churn. A few examples of how to engage your customers outside of scheduled QBRs:

  1. Email Marketing – remind your customers how your product provides them value, share case studies and success stories from other clients, etc.
  2. Educational Webinars – host a webinar to educate your customer base about how to take advantage of your product and inform them of value they might not be tapping into.
  3. Take a Pulse – maybe a QBR isn’t enough? Have the individual in charge of the relationship/renewal do standing check-in calls on a cadence that makes sense (weekly, monthly, etc.). This provides a forum for consistent engagement with the customer and a temperature check for how well the relationship is performing.

Step 5: Quantify Churn Risk
Putting a number or percentage on how “at-risk” a customer is based on prior data and metrics will help you and your team stay ahead of churn.

Being able to spot trends in customers who churned can provide triggers for proactive outreach and escalation efforts to get senior individuals in front of customers showing similar indicators so that “save” actions & deals can be put into place to secure any future revenue deemed “at risk”.

Note – there are customer success SaaS platforms such as Gainsight & ChurnZero that do exactly this but require accurate, consistent customer health data to be valuable.

Step 6: Excellent Service
What if we told you if you fix only two issues you can handle the 70% of why customers reported ending business with a company because they didn’t feel cared after, according to a Forum Corporation study.

By offering an enhanced customer service experience you address the two main reasons:

  1. Rude Service
  2. Slow Service

Be available to offer support, no matter the request. And be polite.

I think we can all agree every business could model its customer service to be more like Chick-fil-A – they’re never rude & never slow.

It keeps me always coming back even if the fries might have been cold one time or perhaps they forgot my nuggets. Guess what, they’ll take care of me for that too – because they know it’s easier to get me to spend more than to get someone who has never bought Chick-fil-A before.

Step 7: Last Resort
Even if a customer has indicated that they are likely to stop being a customer, that does not mean it is the end result.

With the difference in the price of retaining customers compared to finding and landing new ones, it only makes sense to tap your best people to attempt to save the day with the best offer.

By having your best handle the last-ditch effort, it provides your customer with an understanding that you value them as a client and want to continue to do business with them.


  1. Do we have a strategy to prevent customer churn?
  2. Why are customers churning?
  3. Proactive engagement with customers.
  4. Quantify risk.
  5. What does great service look like?
  6. If you are going to go down, go down swinging.

With the current economic environment staring down companies, those who have a firm foundation for preserving their customer base through taking on the right customers, providing a great customer experience and getting ahead of issues when the alarms are sounding will be set up for success in 2023.

Let’s get to work.

Prescriptive Profits #7