7 Ways to Turn from Customer Churn

Now more than ever, businesses are prioritizing the retention of their customers, as it has proven to be more expensive to acquire new customers than to keep the existing ones happy. However, no entity can be everything to everyone, and the reality is that every business will experience customer churn at some point. Customer churn is a term that’s commonly tossed around in the world of marketing and business, but what does it actually mean?

Specifically, customer churn refers to the metric that measures and represents the percentage of customers that a business has lost over a certain period of time. Churn can typically be calculated by simply dividing the number of customers lost throughout a time period by the number of customers you started with at the beginning of that period. Once a business understands its churn rate, it can better evaluate how to improve certain processes and avoid others to reduce churn as much as possible.

This is important because as we said before, customer retention is crucial to the success of a business as it relates directly to revenue and company growth. And we all know the best way to keep your customers is to make sure they’re not only happy at one touchpoint, but happy throughout the entirety of their usage of your product or service.

Customer churn can happen for a number of reasons, including:

1. The product/marketing fit is misaligned. If your customers are not in need of your product or realize they cannot solve their problem using your product or service, they are most likely to churn. After all, who wants to buy something they do not have use for?
2. Poor customer experience. Let’s be real: Nobody likes to experience poor customer service, no matter where they are. Whether it’s at a restaurant, in a clothing store, or in a business setting, part of what makes customers remain loyal is the experience that they have with a company.
3. Complicated onboarding process. While onboarding for certain services may be self-explanatory or come with a guide that makes navigating the product simple, this is not always the case for B2B or software services. When companies don’t offer thorough onboarding programs that help customers fully understand how to utilize a service, customers are likely to churn. This is because your customers want to be able to understand how to use your product or service to fulfill both their short-term and long-term needs, and are unable to if they cannot figure out how the product works.
4. Price. Many customers have churned when they feel like the price of a product or service is out of what they are comfortable paying for. Oftentimes, if customers can find a similar product or service that is more cost-efficient for them, they’ll likely choose the cheaper option.

And the list could go on and on…

Customers churn for a myriad of reasons, most of which are personal or remain mysterious to some businesses. The truth is, not every customer is the best fit for your business, and you can’t be the solution to everyone’s problems. While it’s important to protect your business from customer churn, it’s also important to make sure you have the most relevant customers on board with your business.

Now that we’ve covered reasons for churn and why it’s important to work to reduce customer churn, here are 7 ways to actually put it into practice:

1. First and foremost, learn how to identify churn by establishing metrics. It’s difficult to determine where your losses are if you don’t have benchmarks in place to monitor where your customers are leaving. Establishing metrics makes it easier for everyone within the business to be on the same page and determine next steps for how to proceed with making sure your customers continue to stay happy.
2. Make sure to target the customers best-fit for your business. Targeting the right audience is a preventative churn measure you can take that will save you a ton of time and energy. By identifying those who are most likely to be interested in and in need of your product/service from the get-go is a great way to ensure the customers you do engage with remain your customers for a long time.

Tailoring your marketing and messaging to the right audience will also ensure you direct your time and effort towards profitable and productive things. Ultimately, you’ll have happier customers and a lower overall churn rate in the long-term.

1. Once you notice patterns of why your customers are churning, reach out to them and get direct feedback on why they may be doing so. What better way to understand how to strengthen certain areas of your business than to ask those who were unsatisfied?

One good way to do this is by contacting customers who have churned and asking them to provide reviews or take surveys. This will bring your company insights that you may not already have. While this also may result in some negative feedback, it’s important to hear where your customers are coming from and take a good look at where you can serve your customers better.

1. Offer incentives that entice your customers to stay. Sometimes all your customers need to keep using your service or buying your product is a little extra love. Providing incentives for your customers is also a great way to build loyalty and show them that you value them. Such offers can prove to be effective in reducing churn, especially for customers who are reaching the end of a contract or subscription and are deciding whether or not to renew, or for customers who have not interacted with your business in a while.

You can offer incentives through customer loyalty programs, exclusive discount offers, “friends and family” promotions, and more. If you’re a SaaS company or offer a product/service where discounts are less accessible, you can always offer free access to resources like whitepapers, ebooks, videos, and more.

1. Provide your customers with ample resources. As we discussed before, making sure the onboarding process is streamlined can make or break it for a customer who is on the fence about churning. Because of this, businesses should go the extra mile to not only set up a smooth onboarding process, but also provide resources for customers to stay educated. You can do this by creating an FAQ page for your customers to browse on your website, set up forums to hear directly from your customers and help them learn from one another, host informational sessions and webinars, and offer customer service tools like chat boxes or phone services.
2. Talk to your customers regularly. In any type of relationship, communication is key. You can’t know what’s wrong if it’s not communicated to you. To really understand your customers’ pain points, you should be engaging with them on a regular basis. Customers want to feel like they have access to your team to ask questions or notify you of any problems or shortcomings. Making yourself available to your customers can also help you strengthen your relationship with your customers and establish loyalty in the process.
3. Stay ahead of the game. Like we’ve said, customers can sometimes churn when they find an alternative service that’s cheaper or offers more competitive factors. To prevent this from happening, you need to make sure you keep your competitive edge and stand out amongst the noise of your competitors. One of the most important parts of retaining your customers is keeping their attention. This can be harder than it sounds!

To stay on top of your game, make sure you’re growing your business at a sustainable pace and focusing on the coming trends and technological advancements that will position you at the top. Keeping your product or service on the cutting edge of technology while also making sure it’s still relevant to your customer base will make it difficult for customers to choose an alternative solution.

Preventing customer churn is certainly not easy, and in some cases is not possible. The fact is, you’ll witness some extent of customer churn throughout the duration of your business venture — and it won’t always be a bad thing. As you continue to navigate churn and how to best reduce it for your business, remember that the ultimate goal is to keep your customers happy.