Customer churn rate by sector
In order to provide a comparison of key sectors, we at Go Inspire combined original research with data. The figures below show the last three years’ worth of trends in a range of sectors:
Churn rates in supermarkets
On average, households now shop 4.9 times a week, across 2.7 different brands. As such, for supermarkets, the game is not to attract all customers, or no customers, but to attract a higher share of the market.
Supermarket shopping differs from other sectors in that there is less of a binary ‘switch’ between brands. As such, marketers should focus on their unique selling points in order to attract a higher share than their competitors, making customer retention a hugely important factor.
Churn rates in banking
At first glance, customer churn in banking is low in comparison to other sectors. However, a large part of a bank’s profitability comes from add-on financial services, such as mortgages, insurance, loans and other investment products.
An increasing trend is the increasing habit of opening secondary current accounts as they offer an incentive, such as low-cost foreign exchange, lower fees, better mobile banking, etc.
Going forwards, forward-thinking marketing campaigns, driven by an understanding of customer needs, will be imperative for any company in this sector.
Churn rates in insurance
Encouraging competitor comparisons and account switching has been in place by regulators of the insurance market for years. This is because it creates a fairer marketplace for customers and avoids a monopoly on choice by any one product or company.
Also, the opportunity for price-led promotions is limited in insurance, as the price is so linked to a customer’s individual circumstances, or risk.
As such, with 25% of the customer base churning every year, customer retention must be found in other ways. This can include excellent customer service for brokers and customers alike, friendly and helpful claims teams, and modern, digital offerings, such as automated email/text reminders for renewal, easy access to policy documents, etc.
Churn rates in power companies
In a similar way to the insurance sector, active encouragement of price comparison and account switching has been encouraged by regulating bodies of power companies, too.
This sector has been rife with companies giving their best offers to new customers, with their loyal customers often paying more in the long run.
From a marketing perspective, customer retention from a service perspective is even more important than insurance. For example, customers do not want to spend a long time engaging with their bill payments.
As such, prioritising investment into smart marketing and streamlining a customer’s journey is essential for this industry.
Churn rates in mobile & broadband companies
Transparency and fairness are key to companies in this industry. With high levels of competition to offer good value, customers are looking to have their exact needs met, at precisely the price they want to pay.
It’s also easier for customers to compare prices online and find the best deals, meaning clarifying your advertising objectives, needs of the target market and offering top-notch customer and digital services, are essential.
In fact, some of the smartest marketing campaigns have been noted as able to predict early signs of customer churn, so that customers can be approached and retained before they decide to switch.
Why do churn rates vary?
Customer churn rates can vary drastically by sector, as every market is different, and every product or service offering is different.
Even for groups of companies that offer a subscription service for example, can vary widely. External dimensions include whether your service is essential, what your competitors are offering or how your industry is regulated.
Internal factors can include a company’s pricing structure and upgrades, contract lengths, service offerings and customer experience.
Find out more about customer churn rates by sector
We have combined original research with official data, and put together three years’ worth of churn rates from the above sectors, plus further information on customer retention: