Customer churn rate is a measure of customer attrition. It is the number of customers who discontinued their relationship with a company, product or a service.
Forrester research states it costs 5 times more to acquire new customers than it does to keep the existing ones.
With a greater churn rate, marketing and re-acquisition costs rise, creating a big impact on the bottom line.
Every business deals with customer churn differently, here are some effective steps to follow to reduce the churn:
- Analyse the reason why customer churn occurs: Dig down deeper to find out why customers decided to leave your brand. Actively use all channels to your benefit: phone, e-mail, website, and even social media to communicate with your customers. Value the feedback you receive, understand the root cause, and work towards it.
- Engage with your customers: Engage your customers with your offerings. Engagement can be achieved through providing clear content about your offerings, regular news updates, promotion etc and focus on measuring customer satisfaction over a period of time, as that will give you great insights.
- Be proactive: Prevention is better than cure. The best way to avoid churn is to prevent it from happening. Set right customer expectations to retain customers. Do not over promise and under deliver, rather, promise and over deliver. By setting right expectations and delivering well will help you build a community of loyal customers, resulting in increased customer satisfaction and reduced churn. Also, add value to their experience, by improving your offerings.
- Target your audience well: When you know your audience well, focus on them, as they are the group of people that will see the worth of your offerings. For effective targeting, use the digital medium, such as social media to reach out to your group.
- Provide phenomenal CX: A negative experience can be harmful for your business and results in bad word of mouth. Digital medium has not only transformed the speed and response time but also has brought a lot of convenience to spread a word, and a negative experience doesn’t take time to spread online. Listen to your audience on social media and use it effectively. Utilise social media for instant responses, train your service personnel with customer service skills, be ready with a customer recovery plan and use technology to reduce TAT.
Use cloud-based customer insights, data analytics and existing data to your benefit to segment and map your customers and drive better customer experiences.
Use the power of technology to exceed expectations in order to keep the customer, and to reduce the churn.