How to Take Charge of Your Churn Rate
The churn rate of a company is defined as the rate at which it loses customers in a given period of time. It is a highly important metric for businesses that provide customer service software. It provides an insight into how well businesses can retain customers.
According to Forrester Research, It is five times less expensive to retain a customer that to acquire a new one. Many other studies have pointed to the importance of customer retention in any business. In a report by KPMG, customer retention stands out as the main determinant of a company’s revenue. Another statistic provided by Gartner is that 80% of a company’s future revenue will be generated by just 20% of its existing customers. In addition to this, Marketing Metrics claims that there is a 60-70% chance of selling to an existing customer as opposed to just 5-20% in the case of a new customer.
So, what can businesses do to get around high churn rates and keep customers from leaving?
- Customer engagement
Reaching out to clients and getting direct feedback is one way to address churn rate related issues. It is the simplest and most straightforward way to understand why customers decide to leave. A simple survey, email or phone call can help companies understand their mistakes and maintain a personal touch, unlike their competitors, in their interactions with customers. Businesses can also offer programs to better explain their products and services. They can increase awareness by hosting webinars and sharing information through newsletters. This makes the customer feel important and valued. Some companies go the extra mile by offering the exclusive support of account managers. It also helps to demonstrate how much companies value their customers through personalised gifts and letters.
- Quality customer service
Impeccable service is an important element of customer loyalty and retention. The most cited reason for high churn rates is poor customer services. Companies need to pay attention to client interaction, which can be enhanced by offering them options like co-browsing wherein representatives and customers can both navigate through a webpage at the same time with the help of certain tools, giving the experience a personal touch. Such customer service software free have proved to be especially useful in changing the customer’s mind in the last minute.
- Understanding each customer
It is an important skill to be able to identify and separate customers who are loyal and those at risk of churning. With the help of big data companies can closely monitor customers’ usage of a service and determine who has a higher chance of leaving. A retention email helps in this case, but service providers must be cautious of the timing and despatch of these emails. A retention email essentially serves as a tool to convince customers to continue using the services that they may have decided to opt out of. It is important to phrase them carefully in order to avoid miscommunication. It could easily send the wrong message to the wrong customer. A retention mail must also provide real incentives for customers to re-evaluate their decisions and that depends on how honest and transparent the service provider is being. Remind them why they stayed for so long in the first place. Ultimately, customers gravitate towards service providers who walk the extra mile to give them the best experience.
- Identifying the target audience
Once a decision has been made on the kind of customers the business wants to target, it must stay focused on them and not be derailed by the wrong kind of customers. In this case they could be trial users looking for temporary options. Businesses can attract customers by studying their online behaviour and providing them with customer service software which are tailor made to suit their requirements. It is important to do things differently to have a competitive advantage and retain customers.
Individual often respond to trends because it makes them feel like a part of a collective. Having some brand value helps tap into these groups. If the right strategy is applied while marketing any service, customers pour in. Integrating current online trends with customer service software can significantly increase brand value and in doing so, curb churn rates.
- Improved Onboarding
Businesses must have an efficient onboarding process. They must be clear in their communication. 40-60% of customers who sign up for SaaS or customer service software trials use it only once because companies don’t paint a clear picture of how their services can benefit them. Businesses can improve onboarding by being open to suggestions and willing to implement them. While introducing a new product it is better to start with familiar features and move on from there because people often cling to familiarity. Most importantly businesses must keep notifying customers and potential customers of latest developments or they can easily fade into oblivion.
No company, especially in today’s saturated digital market, can thrive without providing great customer service even if they provide the best of everything else. How businesses treat their customers reflects their core values and their vision for the world at large.