In today’s day and age, information surrounds us everywhere we go. Information is displayed to us on our computers and laptops, it is put on billboards, and we walk around all day every day with information in our pocket. With that information comes new decisions to be made. Now that anything and everything a brand does can be accessed at all times, customers are using this knowledge to make smarter buying decisions than ever before.
This shouldn’t be news, but as more and more businesses adapt to the new way customers think, changes need to be made. Customers no longer have the same reasons for staying loyal to a brand or company. With other options available at the touch of the button, companies are starting to see higher churn rates and less customer retention.
Hoping to combat this, we have put together 5 secrets on how to reduce churn rate in this ever-changing marketplace we now find ourselves in. Some of these secrets may seem obvious, but since retaining customers has become harder than ever, maybe they aren’t. Let’s get started.
Secret #1: Focus on the good, not the bad.
Maybe it’s just the optimist in me, but one of the best ways to move forward in business is by focusing on the good, not the bad. When it comes to finding out how to reduce churn rate, the same ideology applies. By focusing on customers who stay with you instead of the ones who got away, you will have a much simpler time reducing your churn rate.
For instance, if you lose a customer who wasn’t happy with how they were treated despite customers who stay reporting that you have excellent customer service, you should not focus on the one who got away. Instead, ask the customers who appreciate your service what you could be doing better.
Many marketers who focus on retention find themselves pulling their hair out, trying to figure out why customers are leaving. The truth is: customers leave. You can’t keep all of them. Once you truly understand this and focus on the good over the bad, you will have the right mindset you need to bring your churn rate way down.
Secret #2: Segmentation is your friend.
You might be wondering, “But how do I know the good from the bad before it’s too late?” This is where segmentation comes in. By segmenting your audience into the appropriate channels, you can ensure that you marketing message is getting into the right hands.
There are lots of different ways that you can divide up your audience, so do whatever makes the most sense for your company and your goals. If you don’t know your audience or customer base well enough to know the different types of segments you need, start off with a customer persona.
Customer personas are simplified, fictional representations of different parts of your market. Create 4-5 of these personas based on a few of the clients you do know, keeping their descriptions vague enough that you can lump a good sized portion of your audience into this category. Once you have laid out the exact needs and goals of each person in these segments, you will have a better idea of when, where, and how to approach these customers.
By meeting the customers where they are, you have a much higher percentage of keeping them around and reducing your churn rate.
Secret #3: Use data for everything.
In our world that has now become full of data (or information) as we mentioned earlier, the company that doesn’t use data for everything is the company that is falling behind. Your competitors surely are (or should be) using data to make decisions and you should be as well.
Before making any marketing decision, you should be asking yourself, “does the data support this?” Every time your customers interact with you, they are giving you the data you need to sell them on your product, you just have to be measuring it and paying attention. This is also the best way to develop the customer personas we just went over.
The best way to reduce churn rate with data is by measuring it wherever possible. Start setting up ways in which to track customer data. Whether this is through your website, mobile app, or point of service, every customer interaction should be tracked and measured. You never know what you might need it for, but better to have it than not.
Secret #4: Measure happiness
If you are concerned about capturing the right data, one metric that you should be covering is customer happiness. Now, obviously, happiness is a pretty subjective thing. However, marketers have come up with something that finds out the information you are really looking for. This metric is called the Net Promoter Score.
Net Promoter Score
NPS was invented by Bain & Co. and has become a standard way of measuring customer success and happiness. The simple question that NPS is based around is a simple one. It goes like this, “On a scale of 1 to 10, how likely would you be to recommend our company to a friend or colleague?”
You might have seen this on a survey before and didn’t know it had a name, but it does. So, how does this help reduce churn rate? Based on their response to that question, you can segment your customers into three distinct types.
- Detractors: Unhappy and potentially damaging to your brand with negative word-of-mouth.
- Passives: Satisfied but indifferent. These customers are eager to jump ship when the next best thing comes along.
- Promoters: Loyal customers who are perfect for generating referral business.
Once you have segmented your customers based on NPS, developing strategies to reduce churn rate will be even simpler.
Secret #5: Automate to satisfy
Once you have collected all of this data and have segmented your audience, the most important step is what comes next. What do you do with all of this information? Customers have come to expect a certain level of automation with any customer experience dealings they encounter. The next step is to automate where you can to ensure quick service and guaranteed satisfaction.
Simple systems, such as receiving a thank you email as soon as making an order, can go miles for your customers. Not only that, but once these automated systems are set up, limited maintenance is required to keep them running. You can also set them up so that the data is automatically sent to the right place so that you are constantly up-to-date on your data and user engagement metrics.
Each of these secrets to reduce churn rate for your business are best used in combination with the rest. Don’t sell yourself short by only collecting data and not using it or automating services without understanding why. Customer retention marketing is all about creating a holistic strategy so that your customers receive a great experience every single time they interact with your business.
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