The team at Qualtrics brings a crucial business topic to life with an illustrated graphic that features 30 statistics on customer churn. Customer churn is the percentage of customers who stopped buying from a brand or business over a given time period. These carefully curated statistics help us understand why customer churn can be so detrimental to businesses. According to the data, customer churn costs U.S. businesses about $168 billion per year. We can see how churn differs across industries and discover new ways of thinking about customer churn and prevention.
The facts tell us that the average customer churn rate in the U.S. is 21%. This might not sound catastrophic, but consider that new customers spend 67% less than returning customers, and now you can see the value of customer retention and loyalty. It also costs six times as much to acquire a new customer as to retain an existing one. Even a 5% decrease in churn can boost company revenue by 25 to 95%. These numbers prove that customer retention is well worth the investment.
Rates aren’t the same across industries. The tourism and hospitality industry has a whopping 45% churn rate, with retail close behind at 37%. It’s clear that some industries present unique challenges that others don’t have to face. The big-box electronics industry averages an 11% churn rate, and media industries have the lowest global churn rate at 16%. Social media apps can face enormous churn rates after 2 years. 93.3% of users leave after 24 months. Studying how churn rates change across industries can help us understand why churn happens and how to address it. 72% of customers switch to a competitor after a bad experience, which means customer satisfaction should be the priority for anyone who wants to reduce churn.
