Customer churn rate refers to the percentage of customers that leave your business in a given period of time. And can be calculated by dividing the number of customers you lost by the number of customers you started with, in a particular time period.
It’s essential for every business to control or reduce its customer churn rate. Otherwise you're just trying to outrun your churn with your marketing budget.
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A study by CMO council found out that customer churn affects business performance as it leads to a 59.9% revenue loss, reduces profitability by 39.6%. And increases marketing and re-acquisition costs by 36.3%.
Furthermore, the Harvard Business Report reveals that a 5% increase in customer retention rates leads to 25% to 95% rise in profits. How is this relevant? It reveals the power of controlling customer churn to increasing your business’s profitability.
Here are simple tips to help you reduce on your customer churn:
1. Proactively Reach Out To Customers
This is a huge one that helped us the most.
Don’t let dormant customers leak out. Wondering how to re-engage them? Proactively reach out to your silent customers and remind them with new products, new offers, and promotions. As it is easier to sell to an existing customer than to a new one.
In our case, the thing helped the most was a little "recent changes" widget that we started showing every Monday.
See, even if you're silently improving your app, customers don't always see it. They stick to their own patterns and routines of using your app they rarely step out of. It might look like "nothing's going on" to them.
Another great tip is sending out a "you're awesome" email. Like "hey, our app just helped you resolve 354 support requests this month, great job!"
Every time a customer goes dormant for some time, reach out to them with a friendly message in their interests. This keeps customers engaged with your business all the time and proves to them how you value their support.
Because according to Esteban Kolsy founder and principal of Think jar, 11% of customer churn could be prevented if businesses simply reached out to the customers.
2. Relevant Timely Communication
Customers need quick replies every time they contact your business and if you are slow to respond, they move on. You need to be available with relevant answers every time your customers reach out for help.
According to the State of Customer Experience Report by Northridge group, 40% of millennials wait for only 60 minutes for responses. Afterward, they change the channel of communication. So, if no reply after that time, even in another channel, then chances are high that the customer may move on.
And guess what? With a proper IT ticketing system, all customer requests are received and issues solved on time. More so, with the shared inbox feature, not a single customer issue or ticket goes unsolved.
Think about it, if every customer’s question is answered on time and every customer objection is overcome. Then customers won’t have a reason to churn your business.
3. Optimize Your Customer Support
Your customer service team must be in a position to serve all your customers to their satisfaction. Because according to customers, poor quality customer support is one of the key reasons they churn a business. And just one bad experience makes them to never come back to your business.
For example, a Customer Experience Impact Report by Oracle reveals that the two major reasons why customers churn a business are incompetent and rude staff plus unbearably a slow service.
So, provide your support team with the right ticket management tool, analyze their performance and motivate them to give your customers the best experience with your business. Remember your support team represents your business and must create a good business image with your customers by serving them well.
4. Embrace Churn Data
It’s frustrating when customers leave your business however you must not just leave it like that. Here’s what I mean: you must dig deep into your customer churn figures to come up with a solution.
Want to know the best part? Analyzing churn data helps you to identify the key reasons why customers leave your business. And it gives you the golden opportunity of covering the loopholes that lead to churn.
You can analyze when customers churn like after what period of dealing with your business do they leave. Or why they churn, is it because your products or services do not meet customer needs. Or is it that your support team is not friendly to customers and doesn’t provide the needed assistance.
5. Tap Often Into Customer Feedback
Tapping often into your customer’s feedback helps you to identify customer issues frequently and solve them. This puts you on good terms with your customers.
In fact, when you solve customer issues, some of your customers forgive your business and are ready to buy again from it. And this is facilitated by customer feedback which you can even ask directly from them as a few customers usually tend to provide the feedback.
Nothing is stronger than the customer's voice because most of your business’s efforts are tailored towards making the customer happy.
As a matter of fact, Kolsky further reveals that 67% of customer churn can be prevented if customer issues are solved at the first engagement. And 85% of customer churn due to poor service is preventable,
6. Identify Customers at Risk Of Churn
Look out for customers who have developed behaviors or actions similar to those in customers who churn. Here’s what I mean, foresee customers who are likely to churn using your previous experience like those who have reduced their visits to your website. Such as from daily to weekly or even monthly.
Reach out to them and try engaging them back with your business and if they have any issues with your business, solve them or promise to work on them.
Combat Customer Churn
Existing customers are the drivers of your business, thus you should divert most of your effort towards not losing a single customer. In fact, according to KMPG, customer retention is a major driver of a business’s revenue.
As if that’s not enough, according to a study by Gartner, it’s predicted that 80% of most business’ future revenue is expected to come from only 20% of its existing customers.
Here’s the bottom line: Jitbit helpdesk software not only provides your customers with the best channel for contacting your business. But also provides your support team with an efficient digital helping hand towards serving your customers with a satisfactory experience.
by Senabulya. Marketing strategist