customer churn

The ultimate goal of any business is to gain and maintain customers. To do that, businesses need to work on their customer retention strategies to minimize their customer churn and maximize their average customer lifetime value.

Reducing customer churn benefits all departments of a company. The marketing team needs to put in less effort in getting new customers, while the production team is well aware of the choices and preferences of the existing customers. The human resources department is satisfied with the service provided to customers by its staff. The management can strategize the growth and expansion of the business without much of a hurdle.

But the main question is, how to reduce customer churn? Is it all about listening to your customers’ complaints, resolving them, and adhering to all their suggestions? Well, the answer is probably ‘No’. It is not always feasible for a business to steer its strategies and action plans toward what the customers are saying. Taking customer feedback seriously is logical and advisable, but making instant changes to the company’s policies and procedures to cater to your customer’s demands is not always practical.

This makes reducing customer churn a bit complicated. On the one hand, if your customer churn rate is high and you do not take any action to rectify the situation, your sales will continue to drop. On the other hand, customer demands for things you cannot offer, like discounts on your high-value items or a new retail outlet within a particular locality, could leave you drowning in debts and liabilities if you listen to and fulfill each request.

Therefore, playing around with your customer churn could be a bit tricky. You have to keep your customers happy no matter what while coming up with feasible, measurable, realistic, and transparent business goals. Reducing customer churn should be both a long-term business goal as well as a short-term goal. In the short run, you would want to make sure, for example, that once a customer enters your retail outlet, they do not leave without buying anything. You would like to maximize your overall marketing campaigns’ cost-effectiveness and return on investment in the long run.

In this post, we will give you a few tips to reduce customer churn. But before that, let’s define what customer churn really is.

What is Customer Churn?

Customer churn refers to the percentage or portion of your total existing customers who stop using your products or services in a given period. It is the percentage of your customers that you were not able to retain. They probably found a competitor’s product more appealing or at a better price and decided to switch from your brand to theirs.

A high customer churn rate is not good for your business. It indicates that you are either unable to offer the kind of products that your customers are looking for or not satisfy them with the service you are offering during and after their purchase.

If your business faces a high customer churn rate, you definitely need to do something about it, or else your sales will continue to drop. Getting new customers for your business is usually more costly than retaining the existing ones. An effective marketing strategy can reduce the customer churn rate for your company.

6 Tips to Reduce Customer Churn

Here are six ways or actions you can take to reduce customer churn in your business.

1. Lean into Your Best Customers

For most businesses, solving the customer churn problem is mostly about identifying the pool of customers that are likely to back off from their purchase from your shop or cancel the order last minute. Once you recognize this pool, it will be easier for you to shift your focus to give the most attention to these people. You need to refocus your efforts to keep these customers on board.

Note that this is not saying that you need to focus on customers who are the most profitable. This is about giving attention to any customers who are at the brink of churning, no matter how small their regular purchases have been.

2. Communicate with Customers Proactively and Regularly

A good strategy to avoid customer churn and keep your customers engaged with your brand is to reach out to them before they need you. A popular way of doing this is by sending newsletters to your website subscribers and your existing retail shop customers. By contacting your customers before they contact you, you are showing to them that you value them. You demonstrate that you are vested in helping them get the best experience with your product or service.

subscription form on a Strikingly user's website

Image taken from Strikingly user’s website

The message that you send out in your attempt to do this should, however, be appealing. You do not want your customers to get annoyed with intrusive adverts or spammy emails, so much so that they unsubscribe or, even worse, block you.

An example of an appealing message would be to send a friendly nudge through a welcoming newsletter to someone who just signed up for your digital product or service.

3. Define a Roadmap for New Customers

Some of your customer churns might be arising from the overwhelm some people feel when they have to get started with a new product or service. If someone cannot figure out how to use your product or navigate your service, they will likely lose interest. In some cases, this happens very fast.

To solve this problem, you need to figure out ways to ease the transition for your customers. You can do things like setting up an onboarding course or roadmap to guide all new customers through your product’s functionality or service features. This will help your new customers manage their expectations about their recent purchases. It will also control the pace at which you convey the information about the latest product or service to them.

4. Offer Attractive Incentives

A way to decrease customer churn is to give your customers a reason to stick around your brand or shop. Offer them something special like new promotional offers every now and then. Develop a loyalty program, or offer a discount or a promo code every month.

subscription form stating a clear incentive on a Strikingly user's website

Image taken from Strikingly user’s website

Keep them excited with your creative sales offers and curious about what’s coming up next. These kinds of small efforts can go a long way in showing your customers that you value the business they bring for you.

A sales offer at a retail store

The way you design these incentives should be relevant to the phase of interaction your customer is with your business. For example, if a customer is at the end of their contract with you, you could offer them a discounted renewal rate.

5. Often Ask for Feedback

Customer churn is often derived from customer frustration. If a customer has a complaint and cannot convey it to you, they will get frustrated. If you do not provide them with an outlet to tell you what’s bothering them about your product or service, they will likely start looking for other substitutes.

To prevent this from happening, think of ways to ask your customers for their feedback regularly. Make sure your staff takes out the time to collect feedback from customers early and often. There are many ways to collect customer feedback, such as sending an email, creating a feedback form to put at your counter, or setting up and distributing an online survey.

form of a Strikingly user's website inviting inquiries and feedback

Image taken from Strikingly user’s website

6. Provide Excellent Customer Service

This is the key to keeping your customers happy so that they stick around. An irritated or dissatisfied customer can easily become a happy advocate for your brand if you can please them with your service. This includes pre-purchase, during the purchase, and post-purchase service.

Customers like to be treated nicely. If they make an inquiry, answer them faster. If they suggest, offer a listening ear and let them know that their suggestion will be considered. If they have problems using your product after buying it, solve their problem by either exchanging it, refunding it, or guiding them on fixing the problem.

We provide full-time customer service to all our users at Strikingly through our website’s live chat feature. If any of our users or potential customers have any queries about our tools or features, we can guide you at any time of day.

Strikingly live chat support

Image taken from Strikingly

Strikingly is a website-building platform, and we are all about helping you provide a smooth web browsing experience to your customers. Our features allow you to build appealing, responsive, and user-friendly websites that can attract more and more customers to your business. We understand that a poorly designed website could be a significant cause of customer churn for a business. We, therefore, build our templates with ease of navigation, neat organization, and attractiveness to eyes in mind.

Customer churn could be a big problem for a business, and reducing it could potentially lead to higher sales volumes and better brand image, which is very good for the growth and expansion of a business in the long run.