“Customer churn” is a phrase that likely makes your (and your Customer Success) team’s skin crawl. Not only is it a bummer when clients decide to leave you for someone else (a competitor, nonetheless), but it’s also way too expensive to experience high customer churn rates.
It’s always a good idea to “same page” before moving forward. Also known as “customer attrition,” customer churn is the loss of clients or customers. Now you know!
According to Forrester, companies lose $1.6 trillion per year due to customer churn AND it costs 5 times more to acquire new customer than it does to keep an existing one.
Woof — we don’t love those stats, but sometimes the truth hurts!
That’s why we’ve decided to concoct a special list of 7 tips that will help you reduce customer churn (for good!).
1. Get proactive
The best way to get ahead of a problem is to quite literally get in front of it. When it comes to customer churn, it’s important to be proactive and establish effective customer success and customer support practices early and often.
One of the most important aspects of customer retention is communication. It is crucial to be proactive with communication straight from the get-go in order to retain your current customers and reduce overall churn.
Reach out to your customers before they need you and show that you are invested and interested in helping them make the most out of your service and/or product.
Be their guide throughout their journey with your brand and company — don’t assume they have it all figured out. Be there before they need to ask for help and establish an honest relationship built off of proactive trust and consistent assurance.
2. Address the pain points
Before addressing customer churn, it’s important to analyze and understand why churn occurs in the first place (specifically with your company and product).
Know what pain points exist and be prepared to communicate honestly and openly about them. And don’t be afraid to admit your product or service isn’t perfect — nothing is.
Customers are much more likely to stay with an imperfect product/service that admits their faults instead of one that claims to be perfect all while knowingly having glaring issues and pitfalls. Again, this takes us back to tip #1 — it’s important to establish a relationship with your customers built on trust and honesty.
Learn and know what makes your product/service imperfect and own it — don’t deny it.
3. Pinpoint those who are at risk
It’s crucial to get ahead of churn, and one of the best ways to do this is by identifying customers who you know are at risk of churning.
FACT: Identifying those who are at risk of churn is one of the best and most popular tactics for B2B companies!
Here are a few key ways to tell if a customer might be at risk of churn:
- Notice if they haven’t been contacted in awhile (hopefully you’re already ahead of this, but if not, this is a good place to start)
- Have they displayed any out-of-character behavior? (i.e. change in overall communication tone, voicing sudden unhappiness, complaints with the product, etc.)
- Are they using the product less often? (a vital sign for B2B/software companies)
- Has their been a change in leadership and/or strategy at their company?
These are just a few ways to pinpoint those who are at risk of churning, but the signs are going to be different for each place of business.
Make a point to identify and troubleshoot the customers who appear to be at risk of churning and get ahead of it ASAP.
4. Offer incentives
Okay, so you’ve noticed the customers and clients who are at risk of churn. Now what?
Offer an incentive for them to stay! Think discounts, special offers, and more. Get creative and think about what would make you want to stay.
That being said…
It’s important to keep in mind that the cost of your retention program should not outweigh the profits to be gained from keeping said customer/client.
Beware of this — it’s a common pitfall for many companies.
5. Target the right people at the right time
Be sure you’re sending appropriate communications and information to the right customers at the right time.
Marketing automation is a fantastic way to ensure you’re communicating effectively and sending the correct message to all current clients and customers.
Our free whitepaper, Marketing Automation is About Timing is (you guessed it) all about this idea — download your free copy here.
Treating all of your customers the same is guaranteed to increase your churn rates — tailor the perfect message to the right audience at the right time with marketing automation software.
Want to go back to basics with marketing automation? We gotchu. Here’s a link to our free Marketing Automation 101 Guide!
6. Take note and document all complaints
Your customers provide priceless, valuable feedback in the form of complaints. I know, it’s tough to hear, but it’s important to take note and physically document any and all complaints.
They may seem like silly little one-offs occasionally, but by tracking complaints, you’ll gain valuable data to suggest where your product is failing to make the grade.
Establish effective processes early to ensure all complaints (and suggestions!) are documented and readily available to the entire company — not just Customer Success.
Not only will your current customers feel seen and heard when you take their complaints seriously (thus hopefully reducing churn), you’ll likely reduce any future customer churn by nipping problems in the bud earlier and more efficiently.
7. Brag about your competitive advantages and differentiators
How does your company stand out? What key features do you offer that competitors don’t? What will your current customers lose if they decide to cancel/quit and join the competition?
Make the answer to these questions apparent and obvious!
Analyze, document, and broadcast what your company does better so they think twice before making the switch.
Sure, it may seem boisterous, but it’s also necessary to make sure existing customers stick around. So don’t feel bad — go on with your bad self and shout it from the mountain tops!
In the end, customer churn is something we all deal with from time to time. Luckily, you’re now aware of these 7 tips that you can use to ensure churn is a thing of the past for you and your company!
And if you need any assistance when it comes to marketing automation, feel free to reach out and schedule a 20-minute chat with our team. We’d love to connect with you!
Cheers to your success,