10 Churn Strategies to Increase Customer Retention
Every company in the world has experienced consumer loss at some point.
And every company responds to it in a different way: some start looking for new customers right away to make up for the loss, while others focus their entire effort on figuring out what went wrong and how to stop others from trying to flee.
Customer churn rates, or the amount of customers who leave a business within a specific time frame, is what this issue is known as.
Your company will be significantly impacted by customer churn because it affects revenues and profits. Surprisingly, more than 2 out of 3 businesses have no plan in place to keep customers from leaving.
Here, we provide a summary of 10 doable tactics to assist you in keeping your current clients happy and devoted while concentrating on lowering customer turnover.
What Is Churn?
If you are still not clear on what churn is or how it can help you grow your business, I recommend that you first read this post and then come back here to understand how some of the strategies you will read here can help you.
As I assume you may find it helpful too, Rob Walling answered the question "what is churn?" and went into great detail too on how to reduce it in your startup in his youtube channel.
Why does churn matter?
Churn is a major concern for many businesses since it reveals how successful (or unsuccessful) they are at retaining consumers.
There are two factors at play here:
First, the most problematic part of churn is its financial component.
Customer churn costs businesses $1.6 trillion annually.
Additionally, it costs 5 TIMES MORE to attract new consumers than it does to retain existing ones, according Forrester.
On average, a 5% increase in customer retention rates results in 25% – 95% increase of profits.
So, it makes perfect sense that focusing on reducing churn is paramount since keeping your customers is profitable!
Yet, not too many companies understand this and, as a result, still struggle in trying to implement a successful churn prevention strategy. So, how do you reduce customer churn?
10 ways to reduce customer churn
1. Monitor customer churn rate
Keep track of the number of customers who are leaving your service, and analyze the data to identify trends and patterns. This will help you identify potential problems and take steps to address them before they lead to a significant loss of customers.
2. Engage with your customers
Engaging your consumers in active product use is another method to stop churn.
Give your consumers reasons to return by demonstrating the everyday value of using your products, by integrating your products, services, offers, etc. into their daily workflows, and in a process known as relationship marketing.
3. When customers cancel, ask them why.
Understanding why your customers are churning is the first step in implementing an effective customer retention strategy.
Yes, it may seem apparent, but let's reiterate it: all you have to do is figure out why customers left. Speaking with the customer is the simplest way to accomplish this.
FACT: 68% of customers renounce a business because they feel that it doesn't value them.
The easiest way to uncover the sources of customer churn is to ask your customers why they’re leaving. You can do this in a few ways, such as through exit surveys or asking customers to choose or enter a reason for canceling on your unsubscribe form.
4. Provide excellent customer support
Providing excellent customer support is essential for retaining customers. Make sure to have a dedicated support team that is available to answer customer questions and provide solutions to their problems.
Consider offering multiple support channels, such as email, phone, and live chat, to give customers multiple options for getting in touch. You should also aim to respond to customer inquiries promptly, ideally within a few hours. Providing helpful and personalized support will make customers feel valued and help prevent churn.
5. Know who is at risk
The best way to avoid churn is to prevent it from happening in the first place, right?
There is always a group of customers that is more likely to leave than others – so it’s in your best interests to know who is balancing on that dangerous edge. This way you can reach out to them in time to make them stay.
Identifying at-risk customers is one of the most popular churn tactics for B2B companies. In fact, 35% of B2B of organizations have used this tactic to successfully reduce customer churn.
Also, after analyzing the reasons for churn, you become aware of certain actions, or maybe the lack of actions, that your churned customers made. This knowledge can help you foresee if someone, who is behaving similarly, is likely to leave your company soon.
6. Personalize onboarding experiences
Providing personalized experiences can help to retain customers and prevent churn. Use data and analytics to understand each customer's needs and preferences, and provide tailored recommendations and experiences that are designed to meet those needs. This can help to make your service more valuable to your customers and make them more likely to stick with your service.
7. Target the right audience
No matter how sophisticated your retention tricks are, they may all go down the drain if you are attracting the wrong audience.
What I mean here is – if your first interaction with the customer is about “free” and “cheap”, then you risk attracting people who are not looking for the value you provide. These “freebie” collectors are the most likely to leave.
It’s better to target those who appreciate the long-term value of products and see investing in good quality as an advantage. You’d better focus on those.
8. Build a community
Customers are more likely to stay with your service if they feel like they are part of a community. Consider creating forums, online groups, or other platforms where customers can connect with each other and share their experiences.
9. Keep your pricing competitive
Pricing is a key factor in customer retention, as customers are more likely to churn if they feel like they are overpaying for your service. Make sure to regularly review your pricing and compare it to competitors to ensure that it is competitive.
Consider offering different pricing tiers and packages to give customers more options and allow them to choose the plan that best fits their needs and budget. You should also be transparent about your pricing and any potential increases, and provide customers with advance notice to allow them to make informed decisions.
10. Offer long term contracts
Finally, how about extending your customers’ commitment?
Instead of the month-to-month contracts, try offering a longer subscription model. In such a way your customers will have enough time to implement the product and see the benefits of using it. And once they see the benefits, they are more likely to commit to the product.
The Reason SaaS Businesses Are Dying
If you want to know more about the impact of churn on your business, check out this video in which Guillaume explains perfectly how churn is affecting your business and makes you see what you need to be clear in your business to stop this "bleeding".
Improve churn rate for your Saas businesses
Are you tired of losing valuable customers to voluntary churn?
Trackey offers a range of features that are designed to help you retain your customers and prevent voluntary churn. With our platform, you can:
Create tailored flows for each of your users through any step of the customer journey, based on their individual needs and preferences. This allows you to provide a personalized experience that is designed to retain your customers and prevent them from voluntarily churning.
Calculate churn and identify trends and patterns. This allows you to quickly identify any issues that are leading to customers churning and take action to prevent it.