Every business in the world has lost customers at least once. While many companies focus on attracting new customers, they seem to ignore the importance of retaining the existing ones.
In fact, preventing churn should be your #1 priority. You ask why? Because a 5% decrease in churn rate can increase profits by 25% to 95%, according to research by Bain & Company.
A higher churn rate is a strong indicator that your customers aren’t happy with you. It is calculated by the number of customers who leave your company during a given time.
Let’s have a look at how you can prevent churn and improve your profits.
Understand Why Churn Occurs
There are lots of factors contributing to customer churn. Some of it may be personal and unique to the customer. However, in most cases, the reason for leaving a company might be one of the following:
Price: They might have found a cost-effective solution to their problem, and that’s why churn. Therefore, it is crucial to establish value and educate your customers so they know they’re getting the best worth of their money.
User Experience: If your website is slow, payment gateway faces problems, or otherwise difficult to use; they’ll be less likely to use it regularly.
Customer Experience: One bad experience and the customer might never return. While most companies have a support team, but in some cases, customers aren’t satisfied with the response they receive, and hence churn. Make sure your support team makes them feel valued and solves their problem as soon as possible.
Talk to your customers
Reaching out to your customers before they need you is a way of demonstrating expertise and care. It helps you show that you’re always ready to help them get the most out of your product. However, make sure that your messages are personalized according to their product or service usage.
Show them the day-to-day value of using your products and offer regular updates on various channels, including emails and social media.
Define a roadmap for your new customers
Getting started with a new product can be overwhelming. And if your customers are struggling to figure out how to get the most out of your product, they’ll likely churn.
Therefore, it is vital to set up a smooth new onboarding process where you teach your customers how to use your product or service’s features. Teach them about the features, functionality, and operations. This will also help you manage customer expectations.
Incentivize your most loyal customers
Your loyal customers are the ones bringing you the maximum business. They not only buy your products or services themselves, but they also refer you to their friends and families. Therefore, you must go the extra mile to keep them happy. If you don’t, they might deter away from you never to return.
The incentive could be anything. From a 20% discount on the next purchase to early access on the sale. Depending on your business, you can also offer 30 days of access to the premium features of your products. Additionally, you can start a referral program where customers get certain benefits every time they refer a friend. This will help you attract new customers while retaining the existing ones.
Improve the quality of your product or service
No matter how great your product or service is, there’s always some room for improvement. Also, there are emerging players in the market who are upping the quality game. Therefore, it is crucial to improve the quality of your product or service continuously. Have your customers find someone who offers a better outcome than you, and they’ll never return.
Ask for customers’ feedback. Understand their pain points when using your products. Ask if there’s any other feature they would like in your service. Regular interaction with your customers will help you understand and improve the quality of your products or services.
Retaining customers and preventing churn can be a tough task. However, with the right strategies in place, you can easily increase the customer lifetime value. Make sure you understand what they expect from you and deliver the very same thing to them.