3 Lessons from the Industry to reduce Customer Churn
January 20, 2021at6:30 PM
"Customer churn" also known as "customer attrition" refers to the rate at which customers who purchase or subscribe to your product or service offering end their relationship with you and stop bringing in revenue for your business.
Customer churn can happen due to a lot of factors but Customer Experience is a very strong indicator of churn. Brands or businesses which care about their customers and connect with them in a more personalized way, have better customer retention rates and hence have better revenue and profits. Paying attention to details and customer signals is the key to improve customer churn, since there are no definitive playbooks or guides for churn management, we can only take hints from pre-existing market scenarios and examples.
According toKolsky, 85% of consumers churn because of poor service that could have been prevented.
The more you are successful in retaining your customers, the more profit your company or brand makes, simple math. Also, It’s a fact and real-life experiences suggest that increasing customer retention directly increases profits, many market studies have also indicated that it is up to 5x cheaper for companies and brands to retain existing customers.
While dealing with customer churn there are several questions we must consider while looking for solutions to somehow resolve the issues faced by your customer base, for example: are your customers unhappy with your product? Is your customer service not up to the mark and is making them switch brands? Are you making enough efforts to connect with your customers? etc. The first steps to solve any issues is to get to the root of the problem, one of the ways to do so is by asking customers for their feedback. Send them surveys and try to understand their views, look for customer signals, read through their feedback texts. Once you figure out where your services are lacking, fix that point and make sure you communicate the same among your customer base, that you took their feedback seriously and made your services better for their convenience. It is essential for any brand to make sure that your product or service is the voice of your customers. Get on a call with your customers. Send them regular feedback forms, that includes NPS metric based questions in them. With the help of the NPS metric, you can easily figure out the no. of customers about to churn. Try to get to know your customer base as flesh and bones, these steps are always helpful and help reduce the customer churn rate.
There are always better and best practices to follow while dealing with your customers, you never know what, when, and how a certain step may turn out to be. But the main thing to keep in mind is that customers appreciate little things, little changes you make in order to show them how much they matter to you. Taking bold steps while making sure not to overstep is the key. Let’s talk about some industry lessons to bring down customer churn:
1. Celebrate your customers
Testimonies are one thing however, also enticing customers with better offers in exchange for their feedback can help. Make your customers feel important by announcing them a customer of the month or something similar. Many brands these days approach their customers and ask them to participate in their contests or feature as a guest blogger. This is post-purchase marketing and it helps. Getting gift hampers, vouchers, or even discount coupons for their participation. Also, the interactive sessions conducted by the customer success teams can help customers connect with the brand, understand brand vision in a better way.
2. Analyze customer churn and use the insights to improve future customer experiences
The most important thing you need to do to reduce the customer churn rate is to find out why customers are canceling or not making any purchases. In order to do so, all you need is to simply ask or follow up with customers who are inactive for a long period of time or who have slowly stopped using your services. Your list of surveys should include a short follow-up survey requesting customers to provide a reason why they’re not active for a long time or why they’re not visiting your store or your website. You can ask them for suggestions while also offering them vouchers or discount coupons to start using your services again or give your brand another try. Also, Collecting data is one thing, and acting on the collected insights is what matters the most. Always analyze customer churn and ensure the amendments are being implemented across channels to improve further customer experiences. Also, gently nudge customers to provide feedback from time to time, follow up with them and close any existing issues as soon as possible. Good after-sales customer service is one of the main reasons many brands successfully retain their customers.
3. Focus on boosting positive customer experience to improve customer churn rate
Take the example of Amazon, they put maximum effort into keeping their customers happy. From providing a wide range of products to delivering them as quickly as possible to your doorsteps. Free delivery and easy exchange and refund policies. Amazon is doing everything right and hence they lead the ranking of the most popular shopping portals in the United States. Based on a survey of more than 2000+ US customers, 89% of buyers agree that they’re more likely to buy products from Amazon than other e-commerce portals. And all these great numbers exist only because of their exceptional customer service.
For any brand to grow and make a profit and improve customer retention rate, they must think about developing positive and strong customer relationships, it will help you win more and more customers. Delivering a consistent customer experience while also making constant efforts to build trust can help any brand reduce customer churn and grow exponentially. At Dropthought we believe that to build a sustainable relationship with a customer, we must value their feedback. We believe in building a situation-based and feedback-centric customer engagement plan that will not only help businesses and brands to leverage the data collected abundantly but also if done right this can turn into a long-lasting opportunity to keep your customers intact and keep the revenue bar up and running. Your customers can express their opinions through the surveys and provide suggestions about your services.