Lessons Learned by Fortune 500 Enterprises who Have Suffered High Customer Attrition Rate

High Customer Attrition Rate is every CEO’s worst nightmare. Rampant customer attrition has been the kiss of death for so many companies. However, a bad situation can be remedied (or preemptively avoided!) by learning from the mistakes of some of the companies who have been hit the hardest by customer attrition.

Microsoft vs. Mac

If anyone is familiar with the loss of dramatic customer churn, it’s Microsoft. Once practically monopolizing the operating system sector, Microsoft lost millions of dollars in revenue to Mac when Mac introduced a product that was sleeker, sexier, and most importantly, offered customers the things that Microsoft did not. Mac was able to capitalize upon the issues Microsoft users had been dealing with for years, including destructive viruses and endlessly frustrating customer service. The introduction of built-in, effective anti-virus software and real-live human beings providing quality customer service was a welcome breath of fresh air.

The lesson here: Microsoft had failed to listen to its clientele, recognize its flaws and fix them. With no strong competitors, the company got a little too comfortable. More recently, Microsoft has made tremendous efforts to stay current, innovative and competitive, and its market value has increased accordingly.

Blockbuster vs. Netflix

Microsoft exemplifies that mistakes can be remedied, but action must be taken immediately. When Netflix came into the picture, Blockbuster’s customer attrition rate skyrocketed. Movies could now be delivered to your doorstep or streamed from the comfort of your own home. Blockbuster’s framework was rendered obsolete. The company had the opportunity to buy Netflix multiple times in the early 2000’s but did not recognize that the fledgling company was really on to something.

The lesson here: by the time Blockbuster accepted that they would have to radically adjust their business model to move into the era of the internet, Netflix had taken control of the video rental industry and Blockbusters everywhere began to close. Blockbuster developed its own online video service, but far too late. The company filed for bankruptcy in 2010. So, adapt with the times–quickly. Take new competitors seriously.

Myspace vs. Facebook

Myspace is a great example of a company that once dominated its sector and then completely fell off the map due to dramatic customer churn. The site was a pioneer in social media, but it stayed relatively stagnant and did not address problems like security concerns and irritating pop-ups. Facebook began as a platform with a limited ivy-league user base. The founders could not have predicted the incredible magnitude of the global reach the site would one day have. Rather than a stagnant five-year plan, Zuckerberg and Co. let Facebook progress organically according to carefully studied user preference.

The lesson here: Facebook is continuously adapting and updating and listening to its users. Myspace did not.


Customer attrition is often not given the attention it deserves. In the long run, customer satisfaction and loyalty will be the key determining factor of success. What Blockbuster and Myspace both failed to do was closely study why customers were leaving, and make the necessary altercations. Learn from their mistakes. Listen. Adapt. Progress. Succeed.

Mark Silver is the Lead Author and Editor of SuccessFULL. SuccessFULL was created in order to be a spurce of news on the fascinating developing world of customer success. On SuccessFull, Mark shares his thoughts on customer success issues, with the hopes to foster a discussion and interaction with anyone interested. The goal of the blog is not to one-directionally publish information, but to create a full engagement between many voices, so that we can all learn from each other.