5 Ways To Reduce the Likelihood of Customer Churn

February 14, 2023
February 6, 2023

Gaming companies spend millions of dollars every year attracting customers to their games. Ideally, they would hang on to each one of those hard-won customers forever. However, customer churn is an inevitability that no company can completely escape.

Fortunately, there are steps companies can take to reduce the likelihood that any given customer will walk away. Learn everything you need to know about improving retention by reducing churn.

Key Takeaways:

  • Customer churn measures how many players quit playing a company’s games in a specific period.
  • Reducing churn helps games generate more profit by reducing the cost to acquire players and increasing the lifetime value of users.
  • There are a variety of strategies companies can employ to reduce churn. The optimal techniques depend on why players are leaving.

What Is Customer Churn?

The churn rate is a measurement of the percentage of a company’s customers who stop using a service or product during the measurement period. To compute the churn rate, divide the number of customers lost during the measurement period by the number of customers the company started with.

For example, a company had 10,000 customers at the start of the fourth quarter of the previous year. The company lost 250 customers during that quarter. The churn rate is 250/10,000 = 2.5%.

Companies can also measure churn rate by other metrics, such as the value of the lost business or the percentage of recurring value lost. Different metrics work better for different organizations.

https://ongamesndata.wordpress.com/2015/07/10/the-player-lifecycle/

Why Does Customer Churn Matter?

High churn rates can negatively impact gaming companies in several ways:

  • Attracting new customers requires more resources than keeping existing ones.
  • It is more difficult to win back customers who have left than to prevent them from leaving.
  • Competitors may erode a company’s market share by winning over churned customers.
  • Unhappy customers can damage a company's brand through negative word of mouth and bad reviews.
  • Existing customers are the best audience for new products. High churn rates may make it difficult to launch new games.
  • Lost customers represent lost revenue.

Churn costs companies in the United States about $1.8 trillion.

https://www.linkedin.com/pulse/welcome-churn-nation-9th-biggest-country-world-youve-never-dorrell/

When Should Companies Calculate Churn Rate?

Determining when a customer has churned is easier for some types of games than for others. Companies that charge monthly subscription fees can usually track churn every month by tracking how many customers canceled their subscriptions during the month.

However, companies that operate other types of games may need to look at other metrics, such as when was the last time a customer made a purchase or logged into the game. Analyzing these metrics can help companies determine when players have churned. It may be helpful to use tools that predict when players are likely to churn.

How Can Companies Reduce Their Customer Churn?

The most effective strategies for reducing player churn depend on the reasons players quit playing a game. Common reasons include:

  • Overly complex onboarding process
  • Switching to a competitor
  • Friends quit playing
  • Lack of new content
  • In-app purchases and paywalls are too expensive
  • Overly repetitive game mechanics

Additionally, players may churn because of frustration with too frequent notifications or other messages, overly aggressive sales techniques, and ads that frequently interrupt gameplay.

Employing one of these five techniques can help you reduce your churn rate.

1. Make Sure the First Session Is Easy and Engaging

Gamers who churn on the first day rarely return to a game. To avoid customer churn during the onboarding process, it is critical to ensure the first-time user experience is fun, engaging, and easy to understand. Keep the tutorial and login options simple.

Make your tutorial interactive and intuitive but do not require players to complete it. If players prefer to jump right into gameplay, include mechanics that guide them as they play. Give players the option to use social logins or to play as guests without logging in, so that players can avoid entering a lot of personal information before they start playing.

2. Use Actual Gameplay Footage in Advertising

A flashy video or animation may attract players to a game, but if the actual gameplay does not look like the advertisement, players may feel deceived. When this happens, people who might otherwise have enjoyed the game may leave in frustration and discourage other players from trying the game through negative reviews and word of mouth.

3. Analyze Player Behavior

To determine why customer churn happens and how to avoid it, companies need to understand what players like and do not like about their games. One way to do this is to simply ask players.

Companies can do in-game or email surveys and ask for feedback on their websites or player forums. It is also possible to learn a lot about players by observing how they play games. Track when players are playing and how long they play. Pay attention to which parts of the game they spend the most time on.

4. Employ Personalized Push Notifications

There are a lot of entertainment options competing for players' attention. Personalized push notifications remind players about a game and prompt them to log back in to play.

However, avoid asking players to allow notifications right away. Many players will ignore a request from a game they just installed. Instead, send a personalized message to players after they have had time to appreciate the value of the game.

Create a sense of urgency by incorporating time-limited reasons to log in to a game. Incorporate regular updates into notifications so players know when to check in for new content.

5. Keep the Challenge Level Appropriate for the Audience

Unless the game is specifically targeting hardcore players that want an extreme challenge, the game should not cause players to fail too frequently, particularly early in the game. This tends to frustrate players and leads to churn. However, players will also quit playing games that are too easy. Games need to gradually progress players into more difficult challenges without overly frustrating them.

How Can Sonamine Help Companies Reduce Customer Churn?

Sonamine utilizes machine learning and user-level life cycle analysis to minimize friction and maximize user retention. Our user retention services can help you reduce customer churn and boost profits. Contact us online to get started.

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