Chances are that your business is affected by customer churn — however, how familiar are you with this concept? If you’re not aware of the true definition of customer churn and how it can harm your business, the time to educate yourself is now.
Simply put, customer churn is the percentage of customers that stopped utilizing your business or services during a set time period. You find out this percentage by dividing the number of customers you lost in a given period (say a quarter) by the number of customers at the starting period (again maybe a quarter).
For example if you had 1,000 customer at the beginning of the period and lost 100 during the period, your churn is 10% (100 divided by 1,000).
The goal is to keep your customer churn percentage low. The bottom line is this: you want to keep customers, not lose them. Lowering this percentage is an absolutely must — so let’s discover six incredible ways to put a stop to customer churn.
1. Pick who you “de-churn”
In an ideal world, your business would retain every client and customer that you have on board. Sadly, losing customers is a part of a business. Some business focus simply on retaining as many customers as possible while still keeping in mind that a few slipping through the cracks is inevitable.
A better approach is to focus on a select group and put an effort from them chrning. As an example, your business is about to lose 25 clients. Ten of these clients are long-time customers who are considering switching to a competitor because of their new promotional offer, while the other 15 are middling clients who only use your services on occasion, or they’re newer clients who aren’t truly loyal.
Spreading yourself thin when it comes to stopping customer churn doesn’t actually help you retain profitability, and that’s the overall goal of your business endeavors.
Instead of focusing on trying to save all 25 of those clients, which of them are actually the most beneficial — the ones you know have the potential to be loyal, or those who will likely fall off no matter what you do?
Sunil Gupta, the Edward W. Carter Professor of Business Administration at Harvard Business School, explains this concept very succinctly through this quote given to Forbes:
“If I offer an incentive to customers most likely to churn, they may not leave the company, but will it be profitable for me? The traditional method is focused on reducing churn, but we contend the goal should be maximizing profits, rather than only reducing churn. People have been trying to refine and improve the method for the last 10 to 15 years, but many are missing the bigger picture.”
Tools like your Twitter Engagement dashboard can help you figure out which of these clients to focus on. Pick the potentially churning clients that will make you the most profitable and pinpoint methods that will keep them on board with your service.
2. Keep up communication
When customers and clients know that you’re willing to reach out to them, whether just to remind them of a current deal you have going on or to convince them to stick with your service. Fedica has a litany of communication tools at your disposal for this very purpose, but let’s quickly discuss why this is so inherently important to stopping customer churn.
First, it’s important to start early when it comes to business communication. Let’s say you direct a customer to follow your business’ Twitter account. Don’t let the trail of breadcrumbs end there. Using a Direct Message campaign, you can then send a discount code (or similar incentive) to this customer. This increases the chance that they actually generate that lead.
From there, this customer is now more likely to stay on and avoid that churn cycle. They have a reason to stay with your service, and that’s because of communication.
This is also just one example — how can your business reach out to the customers and clients you have right now?
3. Set up a roadmap for the new customers
In line with the above advice about communication, don’t leave your customers out in the cold when it comes to directing them through your business. A customer should never happen upon your website and wonder what to do next.
A predictable onboarding process gives a client a starting point, then directs them from point to point until they finally generate that precious lead.
Clients are likely to lose interest quickly if they don’t have an incentive to stick with your business. Understand your customer through tools like our follower map. What are they interested in? How can utilizing this information help to keep your customers loyal to your business?
Fedica isn’t the only tool you can utilize to accomplish this, either. Communication tools like a welcome email can clearly offer your client “instructions” on how they can effectively interact with your business, which raises your profits while preventing customer churn.
4. Incentives, incentives, incentives!
Why have I thrown around the word “incentive” so much? Because incentives work.
Understanding a customer’s needs and catering to these pain points is how your business keeps running. Features like loyalty rewards and regular discounts will keep your customers coming back for more, which lowers your churn statistic.
What if you aren’t a retail business, though? You don’t have the ability to throw around discount codes when your clients have hyper-specific needs! This actually makes your job easier. Instead of throwing coupon codes at a group of customers and seeing what sticks, you have the ability to directly attend to a specific client’s pain points. That increases their potential for loyalty.
5. Get more feedback
Sometimes customer churn isn’t an issue of not incentivizing enough. Your customer churn stats may actually be high because of a problem that exists within your business.
Using tools like our tweet alert system , it’s easier than ever to track what your Twitter following has to say about your business. If there’s a problem you see coming up over and over again, don’t just watch your feeds — fix it.
A side note: customers are more likely to stay loyal to a business that they know wants to listen to their thoughts. Keep your social media ears open.
6. Competition is key
Finally, one customer churn culprit will always be your competition. If a similar business is offering a service at a better rate or a higher quality, why should your existing customers or clients stay with you? Don’t give them a reason to leave, but also don’t let your competitors give them a reason to switch over either.
Keep an eye on what your competitors are doing in order to reduce customer churn. Stay relevant and stay aware of what your customers are looking for in a current business or service. And of course establish a feedback mechanism with your customer throughout their journey with you.
Don’t just grab onto one piece of advice here and run with it — take a look at all six suggestions and consider them along with the tools Fedica has to offer. Customer churn is something that can’t be ignored, but it can be prevented as much as possible.