There’s a reason customer satisfaction is high on the agenda for almost all successful companies… customer churn is very expensive. But even more than that, having customers that are not happy or leaving for some other reason is a very unsatisfying way to run a business. You can hardly feel like you’re making a positive impact if a large proportion of your customers are leaving. Which is why it’s well worth making an effort to figure out how to decrease customer churn in your business.
Often, there are simple things that can be done to reduce customer churn. Most studies show that it’s 5 times more expensive to attract a new customer than to keep an existing one so pay attention to this metric!
Here are 10 simple ways to decrease customer churn…
1) Sell to the Right Type of Customers
This applies to both the marketing and sales techniques used by your business. Basically, you need to make sure the right type of customers are entering the top of your sales funnel.
When marketing your business, ensure that your messages are highly targeted to the types of customers that tend to get the best value or results from your offerings. If you go too broad, you might attract more customers, but you’ll find that more of them will churn – costing you money and reputation in the long-run.
Likewise, when you’re selling, ensure you include the right qualifying questions so that you can discourage potential customers from buying if they are not likely to value your offering appropriately. That’s right – it’s better to turn away some customers before they signup rather than let them become a headache later.
An example of this might be qualifying potential customers based on size, location or industry. Keep your standards high and be known for being great within your specific target market.
2) Resist the urge to Oversell
Being hungry for the sale is good, but not at the expense of giving customers realistic expectations. Of course, your sales team want more sales, but if it’s too easy for them to signup customers and then forget about them, you can easily end up with a customer churn problem. Sell convincingly, but ensure your sales messages are credible to build long-term trust.
3) Have a thorough Customer Onboarding process
After a customer has signed up, don’t switch off! It’s the time to make sure that they really get set-up properly. Walk them through this process step by step to ensure they fully understand what they’ve purchased and how to get the most out of it.
This could take the form of an account mangement call, an onsite visit, an email series, or perhaps an online wizard. No step should be too hard to complete or take too long. Many customers abandonne in these early stages before they even really get started, so take the customer onboarding process seriously.
4) Keep in regular contact
A customer that you never talk to or even email can easily feel neglected and unloved. Left in this state, it doesn’t take much for a competitor to woo them away. Customers that are never contacted can also forget about you too. They might forget to use your product/service or get the most out of it, or they might forget that they are paying you and after reviewing their invoices, might just decide to stop the service.
Don’t let this happen! Have a system in place that ensures customers are properly cared for with the right combination of human and automated contact. (Obviously this will vary depending on the value of your product and other factors.) Don’t just leave account management for the problem accounts – be in touch before there’s a problem.
5) Tell customers about other products / services
Cross-selling is a great way to increase revenues, but it’s also an excellent way to decrease customer churn. If customers don’t love one product (for whatever reason), give them something else that they can love. Or it might be different features or benefits within the product that they’re already using. Keep innovating and improving, and don’t forget to tell customers about the changes and new things you’re adding. Get your sales or account management team on the case and call your existing customers to see what else you can offer them.
6) Help customers get the most out of your product / service
Despite your amazing onboarding process, there will still be some customers that lapse in their usage of your product / service. Find out why this is and then set up a system to catch these customers and talk them through making the most of your offering. (If you have a software or digital service, you may be able to tell which customers are under-utilising your system.) Sometimes you might need to provide more ideas and inspiration, extra training, or maybe even extra installation.
7) Use Social Proof to Remind Customers of your Value
Even if customers do make full use of your service, they might still wonder whether the grass is greener elsewhere. Here’s where you can use social proof to give them confidence that they’re already with a great business. Case studies, testimonials and highlights of positive feedback on social networks all serve as great reminders that your customer has made the right decision by choosing your business and should forget any ideas about switching.
8) Collect Customer Feedback regularly
It’s hard to decrease customer churn if you don’t know where your problems lie, so put a system in place to regularly get an assessment of your customers’ satisfaction levels. This data is useful on an aggregate basis, but also on an individual basis.
Use the aggregate data to determine what problems need to be fixed, prioritise new improvements to your service/products, and improve your communication with your existing customers.
On an individual basis, ensure that each customer feels ‘heard’ – especially any customers with suggestions or complaints. They are giving you an opportunity to make a change before they churn!
The easiest way to collect customer feedback is to set up a small survey online (surveymonkey.com makes this easy). Or, you can set up a survey using a spreadsheet and have your team make calls.
9) Speak to Every Single Customer that Leaves
Often, one of the easiest ways to decrease customer churn is to have a proper conversation with each customer that decides to leave. Sometimes there’s a good reason for them leaving, and other times, it’s a simple misunderstanding. Put in a system so that each churning customer gets a call within 24 hours. At the very least, you’ll get some amazing insights.
10) Part Ways on Good Terms
Even with all the best systems in place and the best possible product / service you can offer, some customers will still leave. Don’t take it personally, just understand that customers leave for all kinds of reasons. Ensure you don’t get bitter or defensive with customers that decide to leave. Remember, it may be a temporary break, and also, they may have others they can refer you to. Just because they decided that your product / service isn’t right for them at the moment, doesn’t mean that they hate it. So don’t turn them against you now!
Unfortunately there will always be some customers that leave but if you’ve done everything you can do decrease customer churn, you can sleep soundly knowing that a certain churn rate is just part of business.