Over the lifetime of your enterprise, customers will come and go for differing reasons. Some clients will find a better solution for their needs, some will no longer need your services, and some will leave because they are no longer happy with your product or services. We want to help you solve this problem and reduce churn rate in a couple of easy steps.
However, a high rate of client churn does not have to be inevitable. There are many different ways that you can reduce your churn rate by using technology. We have put together 7 strategies for you that can be the difference between losing or keeping a valued customer.
Let’s get into it.
(1) Communicate with your customers
Our first strategy for reducing client churn is a fairly obvious one, but you would be surprised how little it is implemented. Communication with your customers is going to be the most important part of reducing client churn since it is ultimately up to them whether they stay with you or not.
Customer communication can take a few different forms.
- Targeted emails (we’ll talk more on this later).
- Status updates and quality assurance.
- Implementing changes and shifting focuses.
- Phone calls to talk over their service and goals.
The most important part of this strategy is maintaining a consistent dialogue with your customers in order to reduce churn rate. They are paying you to do work for them, but, if they don’t even have a relationship with you, switching to another company won’t be that big of a deal.
On the other hand, if you have had good communication with your customers from day one, they will be much more likely to stay with you. Your job with customer communication is to make sure that they 1. know who you are, 2. understand the value you bring to them, and 3. view your company in a positive light. Do this, and you will be off on the right foot.
(2) Determine your weaknesses
Another important strategy for reducing your churn rate is fully understanding your weaknesses and proactively combating them at every turn. While clients are often happy when they first sign on as a customer, a combination of buyer’s remorse and need for instant gratification will kick in and soon they will be looking for reasons to leave.
Again, communication here is key. How will you ever know what customers view as weaknesses if you never open that dialogue for them to give you feedback? Reduce churn rate by ensuring that your customer service and sales staff both understand what your weaknesses are and are ready to answer any questions that customers might have about them.
Being ready to match any doubts with solid information about how you are working on it and the benefits you provide that counteract it will do wonders for setting your customers’ minds at ease.
(3) Identify at-risk customers
You will never be able to reduce churn rate in a vacuum and often there are multiple warning signs and red flags that will pop up before the client eventually cancels your agreement. Do not ignore these red flags! Instead, try to send information to these clients to try and get them reengaged in the dialogue and find out what is bothering them.
What happens if they aren’t engaging with you in the conversation? Well, first of all, do not send them a “We Miss You” email. This might end up doing more harm than good. You need to begin by segmenting your customers based on engagement.
By putting these customers into their own segment, you can send them targeted emails to try and reignite their interest and engagement. Sometimes, there will be nothing you can say or do to keep a customer, but understanding who might be more prone to quit and meeting them where they are might be exactly what they need to keep them on. For more info on segmentation, check out this beginner’s guide.
(4) Focus on the onboarding process
40-60% of clients who sign up for a free software will never pick it up and use it again. This is an enormous red flag for many companies, but we like to see it as a huge opportunity for improvement. Try not to get overwhelmed by the numbers and divide your goals into things you have control over and things you don’t.
If you customers don’t understand the product, don’t know what it does, and can’t figure out what the value of it is, then why would they ever use it? It is your job in the onboarding process to teach your customers these things and wow them enough for them to come back to your product. A few metrics to watch and areas of opportunity include:
- Map out and understand your onboarding process (for a quick guide, read more here).
- Determine your friction points. If you are seeing drop-offs at certain points in the process, review them with your team to make sure you haven’t missed a potential customer turn-off.
- Identify highly volatile metrics and keep an eye on them. Companies that watch the areas where customers typically churn have been able to identify problems in their process, like customers using their product incorrectly or not spending time in the system.
- Figure out the highlights. Once you know where customers who have loved the product were finally sold on the idea, highlight these areas and push them so that other customers will hopefully have the same “aha!” moment.
By tracking the onboarding process, identifying key red flag areas and potential opportunities for success, you should have a much better idea of how to get your customers on-boarded properly and how to retain them for longer than before.
(5) Watch your competition
Something that is almost as important as tracking your own clients is tracking the moves your competition is making and ensuring you aren’t falling behind. There are multiple online tools for keeping up with your competitors. We recommend ClientHeartbeat or HubSpot, especially if you aren’t sure who your main competitors are. There may be someone out there you need to be aware of.
A common mistake that companies make when tracking competition is trying to match every move that they make without fitting it into your overall marketing strategy. What companies need to remember and understand is that sometimes your competitors will simply be better than you in some areas, but this doesn’t mean that you should give up.
Instead of trying to improve the areas that you are O.K. at and your competition is great at, focus on what makes you unique and what you are best at and focus on that. The goal is to be the best at the areas you know and let your competition hurt themselves by trying to be good at everything. By improving on your best features and continuing to improve them, you will be miles ahead of your competition instead of playing the Hare to their Tortoise.
(6) Send personalized emails
We touched on this briefly earlier, but something as small as sending personalized emails can truly be the difference between customers staying or going to another company. You may be asking, “What does this mean exactly?” By personalized emails, all we are talking about is showing your customers that you care enough to send them an email with their name from a real person.
Instead of having a generic, no-reply company email address send them updates, have different people at your company use their emails to send them reminders and retention-focused emails. All of this can still be done through an email marketing software. Simply create an email template where it will put in the customer’s name for each specific email and send it from your address.
And voila! Through a few basic steps you now have boosted your credibility amongst your customers and taken another step to reduce churn rate for your business.
(7) Thank your customers
Our final strategy is definitely the simplest, but it bears repeating. Thank your customers. Obviously, they are paying you for a service, so don’t get too personal or sentimental with your thank yous, but customers want to know that they are a valuable part of your client base.
Whether it is following the initial signup, after an anniversary, or simply a random time, sending emails to your clients thanking them for their support will not only remind them of the good work you have been doing but will give them a good feeling. You can also potentially use this opportunity to present a product offer or promotion, only furthering the depth of their agreement with you and the value you offer.
By following these seven basic strategies, you will be well on your way to higher retention and a reduced churn rate that could translate into thousands of dollars in profits every month. Don’t ignore the signs and get started today!