• Retail Marketing

Is Your Retail Churn Rate Above Average?

by: Robin Johnston
4 min read

Churn rates are one of those metrics we dread. But the number of customers leaving your company in a given month or year is just as significant as the number of new customers obtained. Are you clear on your retail churn rate? And do you know where you stand compared to others in your industry?

How to Calculate Your Churn Rate

If you don’t already know your churn rate, it’s not difficult to calculate. Just divide the number of churned customers by your total number of customers. What can be difficult is figuring out when a customer has churned. For this calculation, pick an objective standard to determine your number of churned customers. You might consider:

  • Length of time since the last visit
  • Length of time since making a purchase

Take into account your average customer’s behaviors and choose a length of time from there. While some businesses see frequent visits, seasonal or luxury retail businesses will differ.

Top Churn Rate Statistics

A generally recommended retail churn rate is between 5 to 7 percent per year. Less than 5 percent is a great goal, but a churn rate of over 10 percent causes concern. Even as you acquire more customers, your business can’t grow unless you have a greater volume of incoming customers than outgoing ones.

Satisfying existing customers is more profitable than obtaining new ones.

  • It costs five times more to obtain a new customer than it does to retain an existing customer.
  • Decreasing your churn rate by 5% increases profits by 25 to 125%.

The majority of customers churn because of bad service, not dissatisfaction with a product.

  • 66% of customers leave because of poor customer service.
  • 68% go if they believe you are indifferent toward them.

Average Churn Rate by Industry in 2020:

Retail: 63%

Banking: 75%

Telecom: 78%

IT Services: 81%

Insurance: 83%

Professional Services: 84%

Media: 84%

*Data from Statista

Tips to Decrease Your Retail Churn Rate

Reach Out for Feedback

You can prevent 11 percent of unhappy customers from leaving by merely reaching out to them. But it’s not enough to wait until you know a customer is unhappy. Only 1 out of 26 customers complain when they’re dissatisfied. The rest leave.

So when you have a customer complaint, you’ve been given a chance to save a customer from churning. Respond quickly and do everything in your power to resolve it.

But don’t stop there. Instead, make it a regular habit to follow up with customers, even in automated form, to ensure they had a good experience. Customers are more likely to bring up a complaint when they have an easy platform to do so.

Resolve Issues Quickly

Among customers who have left a company, 67 percent said they would have stayed if somebody resolved the issue the first time. The moral of the story for retail businesses? Don’t let the problem drag on or do just enough for a one-time solution.

Response time is equally important when addressing an unhappy customer. A quick public response can work wonders, not just for the customer in question, but to maintain your public image. For example, if a customer leaves a nasty complaint on social media, no matter how unconstructive it may be, give a polite public reply on the platform, but be sure to redirect them to a private channel, such as message, email, or phone, to resolve the issue.

Ensure Fairness

American consumers value companies with a reputation for fairness and honesty. Ninety-three percent of consumers surveyed said honesty in a company was “very important” to them. When dealing with an issue, 60 to 70 percent of consumers would stay with a company that resolved problems reasonably even if the result was not in their favor.

But don’t brush this point off as easy. Everyone wants to be fair in theory, but when business picks up or customers misbehave, deciding what’s acceptable at the moment may not be the best policy. Instead, establish a system to ensure fairness.

While personal judgment can certainly trump systems in a unique situation, having pre-established policies in place will keep your business addressing complaints without disruption. Strategies to ensure fairness can be as simple as an upfront policy on returns and exchanges to an established chain of command for addressing customer complaints. Consider what issues are typical for your store to address those.

Use a Proactive System

Today systems like wi-fi marketing and analytics have the potential to reduce churn rate significantly. This kind of software doesn’t merely report your churn rate after your customers have already left. They can identify customers at risk of churning and take immediate action. Reminding customers of your business with sales and promotions, offering exclusive perks to existing customers, and even sending “we miss you” emails can encourage at-risk customers to return.

Restaurant Marketing FAQs

What is Restaurant Marketing?

Restaurant marketing is the process of getting people to visit your restaurants. Restaurant marketing creates loyalty, provides data to research, analytics, and allows restaurants to gain a better understanding of their ideal customer profile. It utilizes all customer channels: guest WiFi, website, social, rating sites, mobile apps, email, text, and advertising.

Learn More About Restaurant Marketing Here

What is WiFi Marketing?

WiFi marketing is a marketing technique that uses guest WiFi to collect & clean customer data such as names, emails, phone numbers, customer behavior, and demographics. This data is used to personalize marketing campaigns to increase customer loyalty, build online reviews, and save at-risk customers. The performance of every campaign can be tracked down to the tangible ROI of a customer walking back in your door.

Learn More About WiFi Marketing Here

What is Restaurant Reputation Management?

Restaurant reputation management is the process for restaurants to manage customer feedback and creating systems to improve customer experiences, passively build positive online reviews, and save at-risk customers. It is a very important aspect of running a successful restaurant business.

Learn More About Restaurant Reputation Management Here

How Does Bloom Identify and Bring Back Lost Customers?

Bloom Intelligence uses machine learning to identify at-risk customers. When one is recognized, the system will send them a message with an incentive to get them to return and re-establish their visit pattern. Bloom users are seeing up to 37% of churning customers return.

Learn More About Saving At-Risk Customers Here


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“Bloom Intelligence really is a step ahead in terms of marketing software and metrics. Their product is reliable, fast and innovative and has helped the company I work for really grow.”

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“Working with Bloom Intelligence has been amazing. They assist you every step of the way and work with you hand in hand to make sure you are optimizing your advertising potential. We are excited to use this tool to help learn more about our customers so that we can personally engage with them and understand our strengths/weaknesses.”

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“In these challenging times, it has been a pleasure working with Bloom Intelligence to help facilitate our service offering to our clients. They were extremely responsive and provided support to mitigate risk and minimize revenue loss. Great partner!”

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Bob Cross, Vice President of Operations

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