Halve Your Customer Churn Rate with These Three Simple Steps
Yuliya Skorobogatova 14 June 2016
Churn rate shows the percentage of customers who stopped using your product or service within a particular period of time. It is a precise metric for measuring the current status of your business and the ability of your company to grow. Moreover, retaining existing customers is much cheaper than acquiring new ones. But how do you make customers stay loyal and keep coming back?
The most challenging part is right and properly set customer analytics. The deeper you understand your customers’ behavior, the clearer you will see your weakest points and the more successful you will be at predicting your customers’ needs. A good CRM system will help you to analyze where exactly the attrition occurs and fix the problems under your control. The most common reasons why the customers leave are the following:
- They don’t need your service anymore - They cannot afford it - Your product doesn’t meet their expectations - You have a poor customer service
If you know where the problem lies you can change the strategy (flexible pricing, new product features, customer engagement campaigns, etc.) to reduce the churn. However, there are several nontrivial ways to reduce your customer churn rates, which we often forget about.
Onboarding and Engagement
Take an action as soon as someone becomes a customer. A good option is to welcome new clients aboard via email. Some products or services require a couple of introductory educational emails which will allow your clients to get to know all the advantages of your product or service and make the most of it. Even if you sell products which don’t require an instruction to use, you should provide your clients with all types of useful information about it. Don’t forget about beautiful visuals. Invite your customers to your social media accounts to continue the communication there. Such value-added features as strong online community, useful information and good customer relations will definitely make your product or service an indispensable part of your customer’s life.
Motivate your customer to stay longer with you. It can be financial motivation (lower prices for a longer subscription), loyalty campaigns, nonmonetary incentives (charity campaigns) or exclusive packages. Another idea is to add gamification to your customer relations. Everyone enjoys having a little fun while making purchases. Make your customers enjoy the communication with your company and they will extend their commitment.
There is nothing worse than disappointed expectations. It doesn’t mean you should under promise and over deliver. Tough market competition won’t allow you to do it. However, making a great first impression is not enough. It is crucial to fulfill or better exceed the promises you made during the sales pitch. How to make it possible? Define your unique selling proposition and align your marketing and customer services around your USP. If you clearly communicate what differentiates you from competitors and emphasize the value you provide to customers, it will be the first step to gain trust between you and your customers and build long-term relations with them.