The Best Tips for Lowering Your Customer Churn Rate
Reducing customer churn is one of the most important strategies your company can use to maintain a high user retention rate. Acquiring new customers is considered to be more expensive than retaining existing customers.
It’s one of the many reasons why so many companies are concerned about reducing customer churn and have made it one of their primary goals to ensure their business can continue to gain a steady stream of revenue.
Acquiring new customers takes a massive amount of effort, from initiating contact to closing a deal. If acquisition costs make up a percentage of your marketing budget, your company is left with barely any resources to improve relationships with existing customers or measure their satisfaction. That increases the chances of customers churning in the coming future.
Customer churn can lead to severe problems if they are not managed appropriately, and competitors take advantage of your struggles and steal away your customers, leaving you high and dry, struggling to make it.
For this post, let's go over the best tips for lowering customer churn rates.
What Is Customer Churn?
Customer churn rate, otherwise known as the rate of attrition, is defined as the percentage of customers who leave your subscription service or product within a given time frame.
When it comes to customer churn, it is essential to understand the pulse of your business and how important it is to solve a customer's issues.
Customer churn is calculated by dividing the number of lost customers by the total number of customers at the start of a time frame. For instance, let’s say you have 600 customers at the beginning of a quarter, and by the end of the quarter, you have lost 30 of them, then your customer churn rate would be 5% per quarter.
Lowering customer churn rate is one of the most critical aspects when developing your customer retention strategy. That provides you with insight into your customer's service strategies and the overall experience your organization is offering to its customers.
Discover the cost of customer churn
When it comes to dealing with a rising customer churn rate, it is critical to find out why your customers are churning. Some of the best companies are capable of preventing customer churn. However, they don't succeed at it through trial and error. Instead, they conduct a thorough analysis of every possible reason for the cause of their customer churn and develop a robust retention strategy from what they have discovered.
Here are several ways you can find out the cause behind your customer churn:
Sending out personalized exit emails and asking them for the reasons for leaving is an excellent way to gather information from those churning customers. According to Groove, they used this strategy and were successful in reducing its customer churn rate by 71%. They sent out emails asking their customers for feedback on the reason why they were leaving.
Taking the time to interact with your customers at every point can assist you in discovering the primary cause behind your customer churn rate. It’s a fine solution that allows you the opportunity to gather qualitative feedback from your customers through interviews and meetings. This can be accomplished by using other effective methods such as live chat for gathering customer feedback in real-time.
Using in-app messaging is also an effective way to gather pinpoint customer feedback at the correct time. You can drive in-app messages to your customers when they are engaged through the process and ask them to let you know of the exact problem. That allows you to get a better understanding of the reason for a customer churning effectively.
SupporTrends can help you organize the feedback you receive from your customers. Our robust AI helps you understand and organize your customer feedback from support tickets and surveys.
Deliver excellent customer service
Customer service is a crucial part of any business, and you need to ensure that your customers are getting exceptional service.
Statistics show that terrible customer service is the reason why 89% of customers decide to leave a company and move on to a competitor instead. Additionally, a percentage of those consumers would recommend a brand to others if they offer excellent customer service.
Customers enjoy feeling appreciated, and they want to know that their opinion can provide some value to your organization. Taking the time to respond to this feedback is a great way to build up goodwill with the customer, but if you want to make your company the best one around, you need to do better than you currently do.
There are several ways you can accomplish this:
Follow up
Unusually your employees will hear from a customer when they have some problem with your product or service. However, instead of remaining idle and waiting for them to reach out to you, consider messaging them and asking about their experience with your product or service.
This can be effortlessly accomplished by sending a follow-up email after they have subscribed or made a purchase. Let your customers know that you are here to help them whenever they need it. Furthermore, send out emails even after the issues have been resolved to see if everything is going fine for them now.
Personalize your messages
Personalization is a crucial factor for establishing a strong customer relationship. It shows customers that you are making an effort instead of sending out a generic email that is common among other brands. Customers are likely to engage with an offer if the interaction they previously experienced with your organization was positive, and you acknowledge that.
Approach them honestly
As stated before, don’t simply send out generic responses to your customers. You must reach out to them with a human approach. Get them connected to a dedicated customer representative and focus on this when speaking to customers who wish to resolve a problem. Customers will appreciate having the same person speaking to them when interacting with your brand.
Encouraging quality communication will help establish great customer relationships and allow your team to receive some genuine feedback about your product or service from people who are using them. They are the best source you have when it comes to getting information on how to improve your business overall.
Improve your product or service
Our data suggests that product performance occupies 9 of the top 10 attributes that matter most to consumers. In an analysis of more than 22,000 product reviews, we identified the most important attribute breakdown as follows:
- Performance / Product 14,874
- Price / value 2,805
Wow! The quality of the product is mentioned over five times more than the price? Yes. Ultimately, the quality of your product is what truly matters the most when it comes to retaining customers.
The product you offer to your customer should match or even surpass their expectations. There tons of companies selling products that lack features and usability when compared to their competitors. If your customers manage to find a product that surpasses yours in the market, they will switch over.
That means you need to continue improving the quality of your product or service. Do so by digging deep and considering your primary offering.
What plans do you have to help solve the issues your customers have with your product, and what is the unique thing that is offered by using your product? Once you have accomplished this, begin setting up detailed customer segmentation. There are several ways to pull this off, for example:
● Which industry are they a part of?
● What are their use cases?
● What features are they looking for?
● What was their customer journey?
Taking the time to segment your customers in some fashion allows you to improve the quality of your products and boost customer retention. Improve the usability of your product by taking away any unnecessary complications from your products.
That can be done by coming up with an ideal customer profile and considering the features they would want on your product. Furthermore, update your product based on these features. Give them exactly what they are asking for and reap the benefits.
Adjust your product messaging so you can solve the pain points of your customers. Take the time to conduct market tests to collect feedback from customers and prospects. Once that’s done, continue making improvements to your products by using an ongoing feedback loop.
Prove the value of your products
While a customer may have subscribed to your email list or purchased a product or service, that does not mean that they are always going to remember the value provided by your company. You need to prove your company’s value to your customers frequently, so they don’t forget what makes you the best compared to the competition. Here are several ways you can prevent customer churn.
Highlight your features
Send your customers information on your products or services features by sending out automated emails. This will remind them how you are bringing value into their lives.
Share content
Create content that provides the customer with information concerning your products or services. The content can include blog posts, infographics, templates, tutorials, guides, and so forth. This type of content lets your customers learn your company’s value and primary benefits.
Case studies
Everyone enjoys reading success stories, so if you have any of them to share with your customers, it would be ideal to do so. You can also consider sending them out a weekly or monthly case study involving your product or service.
The market is always competitive regardless of the industry you are involved in, so you must remind your customers of the value you provide to them.
If you don’t take the opportunity to do so, your competitors will have an easy time stealing your customers. That is why you need to highlight your value to ensure your customers can continue coming back to your arms instead. Customers will remember the value you provide and what it can do for them.
Create loyal customers
An exceptional strategy that can help you reduce customer churn is to create a robust base of loyal customers by taking time to build relationships. By doing so, you will reap the benefits of having customers that spend more than new ones and are likely to refer your brand to others. Here are a few ways you can start investing to obtain loyal customers.
Provide discounts
Most people tend to have a tough time giving up a price reduction, especially if it's on an item they want. Offering your customers discounts is an excellent way to build their loyalty and increase your profits. For instance, each time a loyal customer's subscription is nearing its expiration date, you can offer them a discount so they can renew their subscription.
Offer freebies
Consider researching your space and look for what your customers may enjoy. By coming up with a customer milestone where the customers receive an award each time they manage to reach a milestone.
These types of reward systems have a high guarantee of turning customers into loyal ones. It also makes them feel motivated to continue coming back since they are highly aware that they will eventually receive a free item.
Create a loyalty program
Loyalty programs are a great way to breed loyal customers and retain them for a long period. These types of customers tend to have a better lifetime value, and they need less work to convert them. Another significant benefit is that these customers have a higher chance of recommending your business to others, which also helps boost your customer acquisition.
If you want to create a loyalty program that reduces churn, here is what you can do. First, you need to understand your customers' needs, which means researching what kind of rewards or incentives they may want.
Then consider personalizing the loyalty program to match the needs of the customers. An effective way to do this is by personalizing the names of the incentives you provide instead of naming them coins or points. Plus, use personalized messages in your loyalty programs.
The program should also be simple to navigate and easily achievable for users. That allows them to feel instant gratification and which should cause more customers to join the program. To boost interest even higher, offer a referral program that will boost your acquisition too.
Conclusion
Customer churn rates play a massive role in the success of your company. It’s essential to be proactive when it comes to reducing churn. If not, your competition will take advantage of this and take your customers away. If you need a way to manage your churn, consider checking out our platform. We can help you automate your feedback by providing the tools you need to reduce your churn rate.