Customer Retention Strategy That Turns Passive Churn into Loyalty by 27%

Our client had a meaningful proportion of customers who churned passively – either by purposely not paying or forgetting to pay by accident. As switching costs were very low in their market, this was a substantial driver of churn, and standard communications sent to these customers had very low success rates, becoming a futile exercise.

Insight: More is not better

Our client’s first instinct was to dedicate a lot of space to explaining and justifying the price increase in detail. This backfired, giving customers the feeling that they were being tricked, as no justification was enough to explain the substantial size of the increase.

The Solution: A redesigned renewal communications journey

We transformed the renewal communications journey to address the price increase more fairly, concisely and confidently and an approach that ultimately proved to be an effective customer retention strategy.

• Value framing: positioning renewal as securing unique value, not just paying a bill
• Radical transparency: clear, upfront explanations of price changes built trust
• Timing: providing a well-timed heads-up a specific period before the renewal date

The Results

5% reduction in churn, against a forecast of considerable increases and confirming the strength of this customer retention strategy in reducing passive churn.

Big Takeaway

Price increases must be addressed fairly, and the precise wording of this explanation strongly affects customers’ likelihood of accepting the increase or churning.