Improving churn rates and boosting customer lifetime value are substantial for the growth of your business. It’s important to calculate and track your customer churn rate as that’s how you’ll be able to understand whether your efforts have a positive or negative impact, as well as identify what you can do in order to retain your customers, grow your customer base, develop your business, and increase your revenue. As you know, marketing costs are high, and new customer acquisition is way more expensive than customer retention, so going the extra mile to keep the existing customers is of vital importance.
First Impressions Are the Most Lasting
Yes, it sounds corny, but this proverb sums up the first strategy for improving churn rates. You need to sweep your customers off their feet during the initial contact and create a “wow” customer experience. Convince them that your products and services are superb by helping them see immediate results of using your product and showing them how it can successfully solve their problems. That way they’ll realize that the experience can only get better as time goes by. If the first few minutes aren’t satisfactory, that can negatively impact their attitudes towards your product, which will, in turn, lead to churn. Make them say “this company is a keeper”.
Spotting Runaway Customers
Some customers are more likely to churn and it’s important that you identify them before they slip away. There are various signs which can help you spot those who are at risk of canceling their subscriptions. For example, an obvious red flag is when you notice that customers start visiting your website less frequently than they used to. Prevent your customers from cutting ties with you by sending them re-engagement emails. This doesn’t mean that you should immediately email a customer who hasn’t logged in for a few days, but rather monitor a drop in usage over a period of time. Online survey tools for establishing customer satisfaction scores can be very helpful. Mark all customers that gave you below average scores as at-risk and try to find out why they’re unhappy. After that, you can come up with ways to improve your service.
The Importance of Being Sticky
Building sticky relationships with your customers will definitely improve your churn rates. You can combine several well-known tactics and capture your customers’ hearts. Loyalty programs, adding value and developing a competitive advantage can keep your customers and make them come back for more.
- Creating a good loyalty program is crucial for establishing a long-lasting relationship with your customers. You can reward their loyalty with free merchandise, discounts, and special offers. Take your services to a whole new level by teaming up with another company in order to create all-inclusive offers and provide complementary products.
- When we’re talking about adding value, this can mean improving your existing services, fixing some bugs and glitches, or adding some new features. Make sure to offer something that can really solve your customers’ problems, because if your added value is offered only for the sake of offering something, your customers will be more likely to churn.
- Keeping an eye on the competition is also important, as that’s how you can offer something different and stand out. This can be done by reducing prices or providing more benefits thus justifying a higher price. Make sure to let your customers know why defecting and opting for another service will be bad for them and what they would lose in that case.
Keep Lines of Communication Open
Many companies are aware how communication with their customers is important and yet they fail to take advantage of this powerful and simple strategy. Listening to what your customers have to say about your products is the most efficient way of learning what they like and dislike. This valuable insight can be used to fix and improve your products or services, and prevent your customers from churning. How many times have you been driven out of your mind by a company that keeps on repeating the same mistake and fails to fix something that you’ve complained about? Don’t be that company, and make your customers happy by delivering only excellent products and services. Talking to your customers, informing them about your new products and features, or just letting them know that you are there to help them if they encounter a problem can significantly reduce churn rates. Of course, this doesn’t mean that you should spam them on a weekly basis, but a subtle reminder now and then will do the trick.
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