Attrition sales are the bane of every company’s existence. It’s the silent killer that can slowly but surely destroy your business if you’re not careful. But what exactly are attrition sales, and how do you calculate them? Here’s everything you need to know.

Attrition Sales: What It Means

Sales attrition happens when customers or clients stop doing business with you or reduce their level of spending. In other words, they take their money elsewhere. The loss of clients can lead to the loss of a huge chunk of revenue.

The churn rate is also referred to as attrition.

The rate at which your customers leave you is used to measure how successful your company is at retaining its customers.

Customer Experience Impacts Client Attrition

When customers stop buying from a company, that is customer turnover. It is considered attrition if they don’t buy anything from that company after a certain time.

As client loyalty becomes an important business goal, it is in businesses’ best interest to reduce their churn rate.

The relationship between you and your customers is extremely important. If their experience with you is positive, they will likely remain loyal to you. However, if the customer has a bad experience, they are less likely to return.

Providing a positive customer service experience is essential to retaining customers. However, a negative service experience is detrimental to a company’s net income.

Customer emotions play a huge role in a customer’s likelihood to churn.

By gathering customer feedback, businesses can better understand their customers’ needs. With this knowledge, sales teams need to know what their customers want. Companies can improve their services by knowing about customer retention and delivering a better overall experience.

The Calculation of Attrition

Calculating your customer churn rate is fairly simple. It expresses the percentage of customers you lose on a monthly basis or annually.


The client attrition rate equals the number of clients lost during a period divided by the total number of clients at the beginning.

As an example, if a company had 650 clients at the start of the month and dropped to 600 at the end of the month, the calculation for client attrition rate is:

Number of clients lost: 50 

650 new customers signed up during the 1st quarter.

ARF: 50/650 = .0769 or 7.7%

The benefits of understanding customer attrition rates

It’s really easy to calculate the client attrition rate, and it might not seem like a big deal, but it’s a key sales success metric for most businesses.

Keeping existing customers is far more profitable than acquire new ones.

There are exceptions to the idea that retaining existing customers is more beneficial than acquiring new ones. For instance, some companies, such as gyms that depend on a membership model, may earn more from new sign-ups than from ongoing. In this case, acquiring more customers may be more critical to the bottom line.

In these cases, it may be more beneficial to its net income to focus on acquiring new customers.

By calculating your customer retention rate and tracking it over time, you can monitor your company’s strengths and weaknesses and make changes to improve customer experiences. By identifying where their company is lacking, they can make adjustments to improve customer loyalty.

What causes client attrition? 

There are many reasons customers may opt out. Some are voluntary, others are passive or involuntary. A B2B buyer might have opted out of your service because their company is no longer in business. Or a consumer may have made a lifestyle change that makes your product unsuitable.

It’s worthwhile reaching out to all of the leavers. However, it’s only the voluntary ones that you should be concerned about as they could become active detractors. Voluntary factors can include the following: poor service, customers didn’t feel valued, customers shop based on price and availability, and they don’t have loyalty to your brand.

Although each customer and company has its own reasons for attrition, there are some common factors across industries:

  1. Poor customer service: Today’s companies must compete on more than just price. Positive user experiences are a key to brand loyalty and customer lifetime value. One negative experience can ruin years of goodwill. Ecommerce companies and direct-to-consumer (D2C), retailers are setting new standards in customer service. Both offer a wealth of insight and ideas.
  2. Service or product failure: It’s a fact that people don’t buy products, they hire them to do something. The tutoring service’s job it to help students learn new skills. The car’s job, for both the driver and passengers, is to transport them safely and comfortably. If a customer leaves your company, it means that your product or service did not meet the buyer’s expectations. Period.
  3. Inconsistency. Customers expect their desired items to be readily available, regardless of where they shop. Ideal inventory should be available online and in-store, with options to ship to your home, pick up in-store, or deliver to your door. You can bet that if items aren’t available in their local store or there are shipping delays for home delivery they will look elsewhere. The customer will search elsewhere if the items aren’t available at their nearest store or if there are shipping delays for home delivery.
  4. Insufficient accommodations: Loyal customers expect an enhanced experience, including accommodation for special requests and needs. A recent study by Wharton School of Business found that certain practices are associated with loyalty damage in a significant way. The No. The No. 1 most hated practice is asking customers to pay shipping costs to return items purchased online. The best accommodations are insider access to valuable content and information, cashback or loyalty points program access and access to a personal shopping record.
  5. Inadequacy in empathy for customers: Customer empathy is cultivating a deep understanding and connection with the needs and feelings that people who purchase your goods and services. Empathetic sales leaders consider the risks involved in buying complex products or services. Empathetic R&D leaders create products that are enjoyable to use. A variety of studies have shown that empathy-oriented companies are more successful than their peers. You are unlikely to inspire client loyalty if you lack empathy.

What can I do to reduce client attrition?

Here are four areas that I recommend you focus on in order to decrease the loss of customers.

Get better customers

This is about acquiring the right customers. Customers may leave if they are not a good fit for the company. It is tempting to try to expand your reach and attract as many customers as possible with low prices and unsustainable deals. Are these customers just looking for a deal or are they here for the long-term? Some customers place a different market value on your products than other customers.

Improve your product or service

The actual product or service that you offer is an obvious factor to consider. It is the most crucial factor (and one that they unfortunately don’t teach enough about in business management school). Is it what customers really want? Is it more expensive than the competition? Is it rightly priced? Is your brand investing in itself to create something that is unique and will attract customers back again and again?

Provide better customer service

Today’s NOW customers have high expectations of every interaction with a company. It is imperative that companies carefully manage their customer contact. How is your shopping experience? Is there anything involuntary going on with the technical side of things Are customers able to find all information about the company’s policies and offerings? How long does it take to deliver? How is customer service and support? These and many other factors can impact a company’s customer loss rates.

Do better marketing

Modern consumers expect companies that understand them, their preferences, and their needs. They should not waste their time with irrelevant or annoying communications. Marketing staff must communicate with each customer in a highly personal manner using the channels, frequency, and messages that work best for them.


Attrition sales are a serious problem that can significantly impact many sales organizations. If you’re not careful, it can slowly but surely destroy your company. Sales attrition happens when customers or clients stop doing business with you or reduce their level of spending. In other words, they take their money elsewhere.

The best way to combat this  is to be proactive about it. Keep an eye on your customer base and look for warning signs that someone might be considering taking their business elsewhere. Then, address those concerns before they lead to actual defections.

Finally, always ensure you’re providing excellent value and service, so your customers have no reason to go anywhere else.

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Editors Note:

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Justin McGill
About Author: Justin McGill
This post was generated for LeadFuze and attributed to Justin McGill, the Founder of LeadFuze.