For the average business owner, maintaining healthy relationships with your customers is a key to achieving success. After all, what is a business without its client base? However, businesses are seeing customers leave at an alarming rate. This is why recent trends have come about focused on customer retention marketing and reducing churn rate across the board.
If you still aren’t convinced that reducing churn rate is important, let’s take a look at a few statistics. According to a recent study, reducing churn by 5% can increase profits 25-125%. Not only that, but the probability of selling to an existing customer is 60-70% while the probability of selling to a new prospect is 5-20%.
Not only will making customer retention a focus improve ongoing relationships, but it can make a difference with your wallet as well. Now that you understand what’s at stake, let’s look at how you can start reducing churn rate right away.
A good first impression
You may have heard it said that making a first impression is important. The same is true when it comes to customer retention. Unless you are able to impress your customers right off the bat, the likelihood of them sticking around drops off rapidly.
Along with that, 39% of consumers avoid vendors for over 2 years after having a negative experience. So, not only are you losing customers, but the chances of bringing them with a remarketing campaign are slim. Those kind of user engagement metrics should alarm you and help you understand why we take customer retention so seriously.
Often users leave early on in the process because they are overwhelmed with information. Ease into the customer relationship and make the onboarding process simple to avoid losing customers before they have the chance to see the value that your business provides.
Study your weaknesses
A common problem for business owners is not only customers leaving, but giving no reason for churning. This will leave a business owner in the dark as to what the real problems are with their customer retention strategy, sometimes leading them to grasp wildly in the dark.
Another way to avoid losing customers in this way is to study and know the weaknesses of your company. Unless you can accurately assess where problems are arising, you’ll have no idea how to solve them.
One technique you can employ here is sending out customer satisfaction surveys to existing and former customers to ask them where you can improve. Far too many businesses fail to take the time to simply ask their customer base what they are doing poorly. Ask them and then, when they reply, take their feedback seriously and make them feel heard.
Make customer service a focus
Which leads us to the next aspect in reducing churn rate: customer service. Almost 70% of the identifiable reasons why customers left typical companies had nothing to do with the product. The prevailing reason for switching was poor quality of service. Turns out, it might not be your product that’s failing you, but your customer service.
On the other hand, 73% of consumers say friendly customer service representatives can make them fall in love with a brand. This is why it is so important to treat your customers right at every possible turn.
Sometimes it really is as simple as being kind and up front with your customers to keep them around. Don’t shoot yourself in the foot by avoiding this basic customer retention technique.
Segment your audience
In the same way that your business is different from other companies, your customers not all the same. Thus, it would be foolish to treat them as if they are the same, right? There is a world of difference between a user who uses your service on a regular basis and someone who never came back after their first interaction, so your approach should differ as well.
Segmenting your audience is one of the best ways to make sure that your customers are receiving the right messaging at the right times. For regular customers, you can keep up with them with a scheduled newsletter or something similar. However, for remarketing and targeting at-risk customers, you might need to get a little more specialized.
Target at-risk customers
Sometimes when you segment your audience, you can put out fires before they spread. One way to do this is by targeting at-risk customers. These are customers who have shown the first signs of churning, but have not formally done so yet. This can be an excellent time to reach them.
Using mobile app analytics and engagement metrics, you can track areas like how often the user visits your website or interacts with your mobile app. If visits become less frequent, you might try engaging them with a piece of related content or ask them for help with a survey. The important thing is that you reach them before they leave.
Automate when possible
Another way in which you can use segmentation for success is through automation. Your customers will likely go through similar stages as your customer and sending them the right messaging during those stages can make all the difference. After all, you don’t want to forfeit the money that went into customer acquisition cost, so consider automating when possible.
This can be something as simple as automatic thank you emails being sent when customers make a purchase. Or it can be more complex, like sending out a list of similar items based on their purchase history, hoping to re-engage. No matter the strategy you end up with, your customers want to know that you care. This is just one of many ways in which you can do this.
Put it all together
As it seems to be with anything, the whole is greater than the sum of its parts. I guess Aristotle knew what he was talking about. When it comes to customer retention marketing and reducing churn rate, this truth holds fast. While each of these techniques can bring you success, the best strategy is to use each of them together in one holistic marketing plan.
Do this, and who knows what you’ll be capable of!
Co-Founder, Gleantap & Mastera