Keeping a business stable can feel like keeping a boat afloat. If a boat has holes in it, it'll sink.
Your customers are the bread and butter to your revenue, the very thing that keeps your business afloat. The more customers that exit your business, the more holes and leaks you'll have in your boat.
Boat analogies aside, reducing customer churn is all about finding strategies to retain both loyal and new customers so that running your business is smooth sailing.
What is customer churn?
Customer churn is the rate at which customers stop doing business with a company. Ideally, we want to keep customer churn at the absolute minimum.
Losing customers will have a detrimental effect on businesses, and it's really not great for revenue. Reducing churn is all about keeping your existing customers. It's the key to keeping your business alive.
Have you been losing customers lately and you're wondering why? Here's how to keep customer churn to a minimum and improve customer retention.
Understand why your customers are turning their back on you
To prevent customer churn, you need to figure out why it's happening in the first place.
You can find this out via:
- Customer feedback forms
- Customer surveys
- Tracking customer behaviour (both pre and post-purchase)
- Staying in the know with your competitors
Look out for common patterns or issues. At which point in the customer journey do your customers leave? Is there a common denominator every time? By pinpointing this, you can take action to address the 'why?' and prevent further customer churn.
Hubspot have a pretty useful equation for this:
- Count how many customers you've lost in one period
- Divide this number by the total number you started with, at the beginning of the period
- Multiply this number by 100
- That % will be your customer churn rate
If you don't do it already, it's a useful thing to do for calculating your churn rate and adding a value of measurement to your customer retention reviews.
Is your churn rate on the rise? Don't worry - there are ways you can keep churn rates as low as possible and improve loyalty:
- Improve customer onboarding processes or ease of buying your product
- Prioritise customer service
- Make it personal, regularly
- Improve customer loyalty programmes
- Build a community
- Be consistent
- Be proactive
Improving customer onboarding
You want to onboarding process to be smooth and efficient. When your customers have decided to give you their business, you want this process to go as smoothly as possible. It will make them realise they've made the right choice. It's an important part of the 'delight' stage of the inbound marketing cycle.
When customers have chosen to do business with you, give them all the confirmation you possibly can, to let them know they've made the right choice.
Providing smooth service from the outset will provide a strong foundation for a long-term customer relationship.
To improve onboarding, make it clear that you're there to help. Let them know where their dedicated points of contact are. Provide a roadmap, so there are no hidden surprises or unexpected fees.
Be clear about your product or service from the very beginning, so that they know exactly what to expect from your business.
Make customer service a priority
Your customer service is part of the customer experience, so it's pretty important. Customer service should be as proactive as possible.
Your customers are always going to have queries and questions - that's inevitable. It doesn't mean there's anything fundamentally wrong with your product or service. It's all about how you can solve these problems, and how quickly you go about it.
Make sure your support team is easily accessible and responsive to customer enquiries and issues. Implementing a multi-channel support system, such as phone, email, and live chat, can provide customers with various options to reach out for assistance. You might want to also consider investing in self-service resources like knowledge bases and FAQs to empower customers to find solutions on their own.
Make it personal, regularly
Customers appreciate personalised experiences that cater to their specific needs and preferences. Leverage customer data so that you can really personalise targeted marketing campaigns, product recommendations, and offers. By showing customers that you understand their individual requirements, you can strengthen their loyalty and reduce the likelihood of churn.
Regular engagement will build strong relationships and keep the churn rate down.
Send personalised emails, newsletters, or updates to keep them informed about new features, product enhancements, or upcoming events.
Customer loyalty programmes
A little thank you can go a long way. Normalise loyalty programmes, and regularly thank your customers for their support via reward systems.
These programmes will reward your customers for their support while encouraging them to stay engaged with your brand in the future.
People love free stuff.
Loyalty programmes will make your customers feel seen and valued.
Consider offering exclusive discounts, rewards, or special promotions to long-term customers. By making them feel valued and appreciated you can lock in their loyalty and make it less likely for them to switch to a competitor.
Build a community
Creating a sense of community around your brand can foster customer loyalty and reduce churn. Encourage customers to engage with each other through forums, social media groups, or user conferences. This not only allows customers to share their experiences and learn from each other but also strengthens their connection with your brand.
Be consistent in everything. Your product quality, your standards of customer service, your branding, the customer journey.
Keeping consistency will meet the expectations of those attracted to your business based on reviews or influencer marketing.
Be consistent in your improvements too. There is always something to be improved. By continually acting on these improvements, you'll better your business in all areas, and it'll help you elbow in between the crowd if the competition is tough.
Being proactive is the key
Really, reducing customer churn is all about being proactive. Spot your churn increase as early as possible. Being proactive will help you fix problems which (could potentially) cause losses.
Taking a customer-centric approach to everything you do in business will help reduce the rate of churn and convert one-time buyers into loyal customers in the long run.