6 Killer Strategies to Reduce Your Churn Rate
There is not a single business in the world that can say that they haven’t lost a customer. And every business employs a different approach to handling it.
While some look for new customers to equalize the loss, others put their focus on analyzing what went wrong and how to stop it from happening further.
This problem is called customer churn. Your churn rate denotes the number of customers who are leaving your product or service during a given time period.
A HubSpot report highlights that generating leads and enhancing customer engagement strategies are the top priorities for over 50% of companies today.
Organizations, irrespective of their sector, spend vast amounts of resources and energies to reduce churn because your churn highlights how happy your customers are with you.
Despite its importance, many organizations struggle in implementing successful user engagement strategies to reduce churn. So how do you reduce churn? This article deep dives into this very problem.
1. Analyze Your Market
While an obvious step to reduce churn, it is also a crucial one. You simply have to find out why your customers decided to leave. Talking to such customers and getting to know them is one way to go about it. It is also an excellent way to demonstrate that you care.
You should actively make use of all media channels such as phone, e-mail, website, live chat, and social media. Surveys can be a useful tactic too if customers don’t want to talk.
2. Proactively Communicate
An important step in reducing customer churn is to actively engage with your customers. This is called relationship marketing wherein you take decisive steps in delighting your customers and showing them value in your product/service so they have a reason to keep coming back.
As a starting point, provide your customers with versatile content that deals with the key benefits of your product. It should include regular update announcements and news about special offers.
Simply put, when you engage proactively with your customers, you address their pain points, build trust, and brand preference which translates into a substantial increase in revenue streams.
3. Create Your Customer Roadmap
Getting started with a new product can be overwhelming for your customers. And if they are not able to figure out how to navigate through, they will lose interest, adding to your overall customer churn.
Your customer engagement strategy here is to ease their transition by setting up an effective onboarding process or roadmap. Such a process will guide new customers through your products, their features, functions, and processes.
Such a strategy also gives you greater control over how you want to supplement the information to your customers. Remember that your goal is to empower your customers. So it is vital that you constantly monitor and iterate your onboarding process.
4. Incentivize Your Customers
Give your customers a reason to stick around.
Offer them something special such as promo codes, discounts, and loyalty programs among others. These small steps can prove to be quite effective in reducing churn and showing your customers that you value them and their business.
A vital point to remember is the time in your customer’s lifecycle when you should offer these incentives. For instance, it can be at the end of your customer’s journey when you are not sure if they will go for a renewal. You can provide a discounted renewal rate to help them finalize their decision.
5. Focus on Customer Service
Many of the big companies made it big because of their focus on providing stellar customer service. It is an excellent way to prevent churn. Your service reps should be empowered to solve your customers’ queries in a timely manner.
An Oracle report states that incompetent staff and slow service are the top two reasons for customers leaving a company.
Enhance your customer service capabilities by upskilling your labor force or outsourcing your customer success operations.
6. Employ Success Managers
You can employ customer success managers to ensure that your most valuable customers are taken care of.
Your managers will provide your customers with the right input to maximize their investment in your product.
For your customers, they become the main point of contact, paving the way for more personalized interaction.
A success manager will take care of the following points:
- Identifying those customers who are planning to leave your product or service
- Nurture the relationship and make them stay
- Make way for stronger and persistent communication
There are two reasons why reducing customer churn should be at the top of your mind.
The first is the financial aspect.
According to Forrester, it costs 5 times more for companies to acquire new customers than it does to keep the existing ones. The second reason is that the more customers a business retains, the higher its revenue will be.
But it all boils down to analyzing the right reasons behind your churn rate and swiftly acting on them. However, do keep in mind that you won’t go from 10-15% to 1-2% within a week or even overnight.
Reducing your churn rates is a process that you need to improvise as you go along but it’s worth the time and effort invested.
Best of luck!