3 Efficient Ways to Reduce Customer Churn
If you are a business owner, one of the most important metrics for the evaluation of the growth of your business is customer churn. It’s tough to measure success if can’t measure the unavoidable failures. Although you strive for making 100% of your customers to keep stuck to your company, it’s just unrealistic. Here’s where customer churn steps in.
Customer Churn – What’s it?
Customer churn is simply the percentage of clients that stopped buying your products or services during a particular time period. Churn rate can be calculated by dividing the number of clients you lost during a specific time frame, e.g. a quarter, by the number of clients you had at the start of that time frame.
For instance, if you began your quarter with 500 customers and ended with 365, your churn rate is 7% because 7% of your clients were lost.
Naturally you should keep a goal for a churn rate as close to 0% as you can. To achieve this, your firm should be on top of its churn rate all the time and give it a prime importance. This can be done with an efficient churn reduction program.
In the above example, the churn rate has been calculated as the percentage of customers lost in a quarter. However, it can also be calculated in whatever way that is the best for your business. Here are some examples:
- The value of recurring business lost
- The percentage of recurring value lost
- The number of customers lost
Ways to Decrease Customer Churn
1. Examine Why Churn Takes Place
This may seem obvious but it’s necessary to emphasize it. You should find out why your customers are leaving. The simplest method for this is to talk to the customers. Talking to them on phone is the best option. This may make them realize that you genuinely care. Plus, it’s the way to instantly find out what went wrong.
2. Engage Your Client with Your Product
This is another method to prevent customer churn. Provide your clients with reasons to return to you by showing the value of using your product, by making your products, offers etc. a part of their daily life. Keep updating them about your products about schemes and special offers. As per a recent report, the best channel for customer engagement for B2B is through email marketing.
3. Improve Customer Service
A poor customer service may be one of the main reasons for customer churn. Analyze if you are lacking on this front with rude and incompetent employees and extremely slow service, and try to improve it.
Analyzing yourself is the best way to reduce or stop customer churn. Do that, improve if needed and you can enjoy the fruits of your hard work.