Blog Post

3 Common Causes of Customer Churn


Customer retention is a major priority for most businesses. Since data shows that 80% of a business’s future profits come from just 20% of their existing customers, it makes sense that you’d want to keep your current clients around for as long as possible. In addition, it’s significantly more cost-effective to retain a customer than it is to attract a new one.

But even with that in mind, customer churn is one of the main concerns agency owners have. That’s because even small improvements here can have huge impacts. By reducing your customer churn even slightly, you can increase your agency’s revenue, improve client relationships, and even impact your lead generation channels.

Knowing where to start can be tricky, though. You’ll first need to delve into the reasons your customers decided not to stick around. Your client probably didn’t simply wake up one day and decide to cancel their services with you. In most cases, their departure can be attributed to one of the most common causes we’ll discuss in today’s post.

Upon your analysis of your own customer churn, you may even find that your customer cancelations can be attributed to other reasons. Once you figure out why your customers are leaving, you’ll want to work to address those concerns and complaints so that you don’t continue to repeat those same experiences with future clients. In the end, you’ll have the information you need to focus on customer retention and remove those barriers to your own success.

What Are the Main Reasons For Customer Churn?

Communication Issues

Whether your agency fulfills SEO deliverables in-house or you’re an SEO reseller for a white label company, communication with your customers needs to be a top priority. And if you run your own white label agency and work regularly with resellers, the same is also true.

Unfortunately, when you’re providing digital services to customers who may not even be located in your area, communication can fall by the wayside. This is especially true if you make video conferencing, kick-off or progress calls, monthly meetings, and other check-ins optional.

While it may be tough to ensure your schedules line up, there’s a lot of benefit to ensuring you keep in contact with your customer on a regular basis. Even if the campaign is proceeding as you had hoped, it’s still important to ensure you’re able to get in touch (and that they can contact you as needed).

Some customers require more hand-holding, while others might believe they don’t need these kinds of “perks.” One of the best ways to avoid communication issues down the line is to help your customer to understand the value of these updates from the start. If they’re clear that you each have an obligation to keep the other informed and that playing an equal role in communicating will allow them to get the most out of their experience, they’ll be more likely to buy into your partnership.

It’s also important that you establish your client’s communication preferences. You probably have some customers who are quick to pick up the phone whenever there’s a problem. Others might be more inclined to fire off an email. You might even have some clients who simply forget to respond until you reach out multiple times through different channels. You’ll want to figure out how your client prefers to be contacted and ensure they know what to expect in terms of frequency.

If you find that it’s your clients who are complaining about a lack of communication from you, you need to take a closer look at how much time you’re spending on this task and make adjustments to your operations as needed. Are you making every effort to keep clients in the loop? Have you been diligent about scheduling and attending monthly meetings with them? Do you let too much time pass before you respond to customer service requests? When in doubt, reach out to your current or former clients to provide you with some feedback pertaining to what you might be able to improve in the future. That doesn’t mean you have to make substantial changes to how you conduct business if you feel it isn’t warranted, but this information can illuminate a lot about what might be driving your customers away.

It can also be helpful to assess how other digital marketing agencies make customer communication a priority. For instance, we schedule kick-off calls, monthly progress meetings, and pride ourselves on having a fast turnaround time to customer service requests made through our reseller white label dashboard. We’ve even had to learn how to say no to customers who have no interest in maintaining those communication channels with us. While it’s never easy to turn down a client, it’s often in everyone’s best interests to ensure we have partners who are invested in their campaigns and will take an active role in ensuring our shared success.

Poor Expectation-Setting

Setting expectations is part of effective communication, but we’ve devoted an entire category to this issue for customer retention purposes. Even if you communicate regularly with a client, that doesn’t necessarily mean that you’ll both be on the same page. And if your client also has clients of their own (which is a scenario familiar to any agency that works with resellers), your client also needs to know how to properly set expectations with their clients.

Simply put, there’s quite a bit of room for misinterpretation here. In some cases, that might be attributed to a lack of SEO knowledge. If you have a reseller who really isn’t up-to-date on digital marketing trends in this area or a business owner believes misconceptions about SEO that simply don’t reflect reality, you’ll need to work hard to improve their understanding and ensure their expectations for the campaign are realistic.

For example, if you ask a customer why they left, they might tell you that the products (or your execution of their campaign) weren’t effective and didn’t produce the results they want. But in reality, the problem might not be the product or your execution; it could simply be that their expectations were unrealistic and were never corrected. A client might pick keywords that are too difficult, for example, or they might be too impatient to see ranking movement. They might blame your methods, but the expectations are actually the problem. And if you don’t do enough to set those expectations from the start -- and to communicate your recommendations on a regular basis -- it’s understandable that they would blame you.

Now, if you fail to deliver on the expectations you’ve set, that’s an entirely different problem that needs to be addressed. But if a client’s departure is due to a knowledge gap of some kind, you can prevent this situation by setting the right expectations upfront.

Working with your clients to understand the value of your services is pivotal. But if you work with SEO resellers like we do, you’ll also need to devote your efforts to making sure that they can set the right expectations with their own clients. If you make assumptions about how your resellers are communicating with their customers, you’ll likely be held responsible when the deliverables or the campaign results don’t align with what the end client expected.

You’ll need to set aside time to work with resellers, especially those who are inexperienced or who seem to shy away from conflict, so that everyone’s in agreement about campaign expectations. In this sense, you’ll be empowering them to grow their business and retain their customers, which will have positive outcomes for your own agency. While you can’t control everything about their client relationships, you can provide them with the resources they need to be clear with their customers, sell the right products, and allow campaigns to start off on the right foot.

Lack of Management or Results

It’s not just about setting clear and reasonable expectations from the start and managing clients throughout the process. You’ll also need to ensure you’re doing everything possible to maximize results.

In some cases, that comes down to client management. For instance, you might need to devote more time to helping a reseller or an end customer understand exactly what they’re paying for and what the value of those products might be. If a reseller doesn’t currently possess the skills to communicate that information to the client or they’re afraid to tell their clients when something just isn’t possible, that’s ultimately going to set your own agency up to fail. In the interest of helping your resellers to grow their own businesses, it’s smart to invest your time in offering them the training and resources they need to manage their own clients effectively.

This problem is even easier to identify when you’re the one directly working with end clients. If you know that you don’t have an easy time telling clients “no” or that you’re willing to provide clients with products they think they want -- regardless of whether or not it will actually improve their marketing strategy -- you’ll need to take some time to get to the bottom of your motivations and ensure you’re actually acting out of everyone’s best interests. While selling a one-off product with no real payoff might act as a source of income in the present, it’s not going to allow for client retention and long-term business growth. And although saying “yes” to every client request may make your client like you in the moment, being unable to deliver what your client is actually looking for can lead to higher customer churn later on.

Of course, it’s possible that part of the problem could be an inability to deliver what you’ve promised to your clients. Whether you’re behind on fulfillment due to understaffing or your in-house team simply doesn’t have the expertise to back up your claims, you might need to consider the idea that you could be losing clients because your results simply aren’t good enough.

SEO is never a “sure thing,” so you shouldn’t be telling your clients you can get them to rank on page one in a month. That goes back to proper expectation-setting among your own team. But if you feel you’ve set reasonable goals for campaigns and you’re still struggling to deliver and to retain customers, you may want to figure out whether you can better serve your clients and grow your business another way -- like by becoming an SEO reseller.

We know that customer retention is a hard nut to crack. It certainly helps to have a partner in SEO, particularly when your own blind spots might be making it difficult for your business to grow. But whether you’re able to identify these issues on your own or need some insight from an outside source, it’s important to tackle them to the best of your ability. Even small improvements can make big impacts -- so don’t shy away from learning the truth behind your customer churn rates.