When running a business, an essential element for maximizing profits is your company’s ability to attract new customers (while maintaining the old ones). However, all companies experience some level of customer churn, which lowers their revenue and profit margins.
Customer churn is the number of clients who stop doing business with you over a specific period. While it’s expected in most businesses, the average accepted rate is 3-8% annually. Anything above that means something is wrong and it might cause significant revenue loss. Some of the best ways to deal with customer churn include the following.
1. Find the root cause of customer churn
Knowing the cause of customer churn gives you a better chance of implementing the best solution. The best way to show you care and find out the real reasons why clients left is by calling them.
Many businesses create surveys for clients, but calling will give you a better answer and increase the chances of your customers coming back. You can also follow up with emails, live chats, exit forms, and social media.
2. Classify your customers
In every business, some customers have higher chances of leaving than others. Others are classified as high-value customers who interact a lot with your business (maybe even make repeat purchases).
Ensure that you take care of your high-value customers first and give them high-quality services because they are the most valuable to your business. Not just as far as company profits go, but these are also your loyalists; your word-of-mouth champions. You can identify at-risk customers by looking at those who have not contacted you or interacted with you on any platforms for a long time. Regardless of your industry, a client who doesn’t engage is one who is not engaged whereas even a disgruntled customer is engaged with your company.
You should also look at customers who made inquiries and never got a response. Identifying this group helps you identify the common reason why customers are likely to leave and helps you make the proper adjustments.
3. Inform clients about your product
One way to attract customers to buy your products or services is to consistently show the value they add to their day-to-day routine. Start by stating the benefits of using your product or service and regularly update improvements, deals, or special offers. You can also educate your customers on how to get your products or services and how to use them. You can pass this information through email, social media, chats, blogs, or your website.
However, to ensure you send the correct information at the right time, listen to what your clients say about your product or service and track their interactions with your business on different channels.
4. Give incentives
Special offers, deals, and discounts are things that keep customers coming back and attract new customers. Obviously, you’ll want to ensure the incentives do not result in a loss, but you can see this method employed on many websites, wherein, if you get the the “cart” and click back, often the company will generate a sudden pop-up discount. While it’s possible for users to game this experience, it tends to be reflective of the customer journey, wherein the price is causing them to back out.
5. Give better customer service
Customers love it when they can reach you and get feedback if they have any questions or complaints. Instead of only having a live chat platform, have a phone number and active social media accounts where customers can reach you all the time.