Preventing Customer Churn

What is Churn?

Churn is the rate at which customers discontinue business with a company over a given period of time. Staying ahead of churn will grow your customer base and profits. 

If you’re like most businesses, 20% of your customers represent 80% of your sales. Big brands know and embrace this which is why growing and maintaining your repeat customer base should be a priority of yours. 

The first step in combating churn is to take a look in the mirror and identify what makes you better than your competitor? Why buy from you? 

Why Your Customers No Longer Buy From You

• Value of your product does not justify the expense – the ROI is no longer there for the customer.

• Customer is frustrated with user experience – dissatisfaction with a product being outdated, difficult to use or access, or the product no longer meeting the needs of the customer.

• They’ve chosen a competitor – Your competitor may be offering the same service or product at a more affordable price, or enticing your customer with extra features or benefits.

• Customer no longer values your product – whatever initially attracted the customer to your product or service has diminished. Perhaps the customer’s priorities have changed, or the product has not improved or evolved over time.

• Motivating factors to use the product no longer exist – customers purchase an item/service because it addresses a need or solves their specific problem. When needs are no longer met, your customers will look elsewhere. 

4 Ways to Reduce Customer Churn

1. Engage with your customers:

Outreach methods such as direct mail, a strong social media presence, and targeted advertising are just a few ways of keeping customers interested in your business. Educate your customers with relevent content to help them benefit from your product. Discover insight and gauge the strength of your products and services with surveys and interviews. If a customer is unsatisfied, take the time to find out why.

2. Re-evaluate your offering:

An obsolete or out of date product will send your customers elsewhere. Adding new, beneficial features without compromising quality will make you stand out and attract new customers. 

3. New customer outreach:

Generate more customers by identifying and marketing to your best prospects. Keep in mind that generating new customers is much more expensive than retaining your current ones so it’s as important, if not more, to market to your existing members.

4. Give your customers a reason to stay:

Over 90% of companies offer some sort of loyalty program. Incentives, such as frequent visitor discounts, special promotions, a loyalty or points program, etc., expresses your appreciation to your customers. Tailor your perks programs to attract your best repeat customers. 

Need help crafting the best plan to combat churn? Chat with an expert today!