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Why Your Customer Churn Rate is High: What’s Driving Customers Away?

17 January 2022






> Why Your Customer Churn Rate is High: What’s Driving Customers Away?

There is undoubtedly some truth to the old saying, “the customer is always right”, in today’s world. In fact, 76% of customers now expect companies to understand their needs and will decide to purchase from a brand based purely on the customer experience (CX) it offers. Therefore, businesses that don’t prioritise their customers run the risk of having a high churn rate as people opt to use their competitors the next time they require field services. 

In this article, we’ll share a simple churn rate calculation so you can understand how happy your customers are with your CX. We’ll also explore some of the top reasons why customers abandon a company and what you can do to stand out from your competitors.

What is Customer Churn Rate and Why is it Important?

Customer churn rate — sometimes referred to as attrition rate — is the measure of how many customers stop doing business with your company over a specific period. The higher your churn rate, the more customers you’ve lost.

But, when you can simply go out and attract new customers, why should you place so much importance on maintaining a low churn rate? There are a few key reasons:

1. Customer Acquisition is Expensive

Shockingly, customer acquisition can cost up to five times more than retention. Think of it from your customers’ perspectives: if they already know how excellent your services are, they’ll be more willing to purchase them again in the future. Existing customers may also be happier spending more and trying out your other services, depending on how impressed they were previously. 

In contrast, it can take much more time and money to convince a new customer to purchase your services as there’s so much competition on the market.

2. A High Churn Rate Inhibits Company Growth

32% of people say that, after just one negative experience, they would stop doing business with a company they previously loved. Sadly, there’s little room for error when it comes to delighting your clients. If you’re consistently driving your customers away, it’s unlikely that they will return any time soon, which makes it much harder to keep growing your business. Instead, you’ll need to rely on acquiring new customers, which is far more costly, as we established earlier.

3. Your Company’s Reputation Takes a Hit

In 2020, around 87% of people read online reviews before engaging with a local business. So, if your customers are leaving because they’ve had a negative experience, there’s a chance they may leave a bad review online. Consequently, you could be losing out on potential clients if they’re reading several poor reviews that paint an unfavourable picture of your company. 

In a post-pandemic world, very few businesses can afford to ignore their churn rates, so let’s look at how to calculate your company’s percentage.

How to Do a Churn Rate Calculation

To determine your current customer turnover, you’ll need to do a simple churn rate calculation. First, you should take a look at how many customers you had at the beginning of the month and subtract it by the number of customers you had by the end of the month.

Then, you’ll need to divide that number by the number of customers you had at the beginning of the month. Finally, multiply your answer by 100 to get your final total.

So the formula would be:

Churn rate = 

(number of customers at start of month – number of customers at end of month) 


customers at start of month

x 100

Let’s say, for example, you had 200 customers at the beginning of the month, but only 150 by the end:

200-150 = 50

50 ÷ 200 = 0.25

0.25 x 100 = 25%

In the example above, your customer churn rate would be 25%. The perfect churn rate would be 0% in an ideal world, but, unfortunately, client losses are inevitable. The best approach is to begin by calculating your current rate and then setting a realistic target for improvement.

Are you unhappy with your churn rate? Read on to find out what could be driving your clients away and how you can improve customer loyalty.

What’s Causing My Churn Rate to be High?

There are several potential reasons why your customers could be abandoning ship, so we’ve put together a list of the most common causes of a high churn rate:

1. Customers Have to Wait a Long Time to Get What They Need

For 60% of customers, long holds and wait times are the most frustrating parts of a service experience. With so many people now leading fast-paced lives, they don’t have time to spend waiting to get what they need. Instead, they expect rapid, convenient services.

There are three key contact points that you’ll need to consider when looking into ways to decrease wait times for your customers:

1. Appointment Bookings

88% of customers expect businesses to have some form of self-service portal available for them to make and amend bookings. Therefore, if your company still expects people to call during opening hours and speak directly to a representative, there’s a good chance you’re driving customers away.

2. The Day of the Appointment

Did you know that a staggering 89% of customers prefer an ‘Uber-like’ application to track the location of field technicians? Customers don’t want to wait around all day, wondering when their technicians will arrive, so, unfortunately, simply providing time slot ‘windows’ won’t cut it anymore.

3. Invoicing and Payment

Modern customers want innovative, more straightforward ways to pay for services, so companies will have to provide the methods to which people are now accustomed. Traditional invoicing methods can take weeks, which is inconvenient for your customers and can also lead to late payments.

Fortunately, when you use a state-of-the-art field service management platform, you’ll be able to meet customer expectations at all three touchpoints. For example, customers can make and amend bookings using an online portal, meaning they can set up an appointment at a time that suits them.

Then, the booking information immediately enters the system, enabling your back-office staff to assign and dispatch a suitable technician. Once the technicians are on their way, the software generates an automated email and text update. The update includes a live tracking link so your customers can see the technician’s exact location.

Finally, the technicians can fill out all essential documents and generate invoices directly from their mobile devices the moment they’ve completed the job. As such, your customers will receive an invoice in seconds and be able to pay the same day using a range of simple methods. 

Customers will appreciate the fact that you’ve kept their needs in mind throughout every stage of the buyer journey and will be more inclined to use your business again in the future.

2. Your Employees Aren’t Knowledgeable Enough

According to data from PwC, 46% of people will abandon a brand if they aren’t knowledgeable. When customers interact with your business, they expect to speak to an industry expert who can provide them with a suitable solution. 

However, if you’re sending your technicians to jobs without all the information they need on the client’s issue beforehand, you’re setting them up for failure. That’s why you must equip your field-based workers with detailed records of each customer job.

The best field service management platforms on the market will often include a mobile app that allows technicians to see everything that your back-office team can access. As such, they’ll be able to quickly read up on the customer’s issue before they visit the location and can fully prepare all the tools and equipment they need to bring on-site. 

Arming your technicians with the technology they need to provide a reliable, knowledgeable service will impress your customers and boost your reputation as a professional, reputable business. As a result, you may notice a significant decrease in your churn rate.

3. Customers Have to Make Multiple Appointments for Fixes

Customer retention rates have been proven to correlate with first-time fix rates directly. Research from the Aberdeen Group shows that field service organisations with a first-time fix rate of over 70% enjoy a colossal 86% customer retention rate.

Subsequently, you must make it a priority to get the job done the first time. The good news is, field service management platforms make it simpler than ever to achieve a high first-time fix rate. 

Once your customers have made a booking via the online portal, your back-office team will have a complete record of the issue. Consequently, they’ll be able to assign a worker based on location, skill set and qualifications, and vehicle type, so the best person for the job will attend.

Then, using an inbuilt asset management tool, they will be able to assign stock and equipment directly to the job. Your technicians can simply pick up everything they need on the day of the appointment and head to the customers’ locations — confident that they will be able to complete the work there and then. 

By improving your first-time fix rates, you’ll be able to impress your customers with rapid services, and your technicians will have more time to attend additional bookings each day.

4. You’re Not Making Your Customers Feel Valued

The number one reason why customers abandon companies is that they don’t feel appreciated. So, if you haven’t already considered ways to show how much you value your customers, now is the perfect time to start.

With a field service management platform like BigChange, showing appreciation to your customers doesn’t require any extra effort. You can add your company’s branding to our pre-designed templates to create professional-looking communications and add customers’ names using the inbuilt CRM (customer relationship manager).

Then, you can automatically send out personalised emails during crucial points of the buyer journey. For example, once your technicians have completed their jobs, the system will send an automated email that includes a customer satisfaction survey.

Aside from helping to make your customers feel valued, the satisfaction surveys also serve as a chance to hear your clients’ opinions on your business. Subsequently, you’ll be able to see what’s working and what isn’t, enabling you to make consistent improvements that lower your customer churn rate.

Field Service Management Software Helps You Stand Out from Your Competitors

Now you know how to improve your customer churn rate, it’s worth taking some time to create a plan and put it into action. By improving your retention rate by just 5%, you can enjoy an impressive 25-95% increase in profits.

In order to meet the high expectations of the modern customer, field service businesses should consider investing in a platform like BigChange. Unlike traditional manual methods, field service management software provides an end-to-end solution for managing your operations. By undergoing a digital transformation, you can seamlessly connect your back-office, field-based workers and customers, enabling you to provide outstanding services every time.

With many field service businesses still relying on outdated processes, now is the perfect time to get ahead of the curve and stand out from the competition.

Build Strong Customer Relationships and Lower Your Churn Rate with BigChange

Some systems manage relationships. BigChange helps you master them.

Our fully integrated CRM system gives you a 360˚ view of every account, contact site and contract. Deliver positive customer experiences at every level thanks to an array of dynamic product features.

Want to find out more?
Discover how BigChange can make your business grow stronger, arrange a free demo today.

17th January 2022



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