Customer churn is the number of customers that stop patronizing the product and services of your organization for a specific time frame. You can easily calculate the Churn rate by dividing the number of customers you lost during a time frame, maybe one quarter, by the number of customers you started with that same period.
When the churn rate is low, it means you are maximizing your customer retention; hence it is the desire of every organization to have a low churn rate. We should also be aware that is almost impossible to have a zero percent churn rate, losing customers is a norm, but don’t be ignorant to your churn rate by letting it get too high.
5 Steps to Prevent Customer Churn
- Provide outstanding customer service and support.
Bad customer service or low-quality customer service contributes to a higher churn rate. An oracle study showed that 89% of customers cease to patronize a company due to a poor customer service experience with the brand. Customers want to be heard by your organization, hence prove to them that they are being listened to.
- Provide value beyond the purchase.
Quality customer service and support aren’t the only ways to provide value to your customers and also preventing them from churning. You need to build a sense and a feeling in them that your company has more values to offer than a single product they need to fulfill a single need. You need to show and prove to your customers that your company provides more value.
- Personalize customer experiences.
Also as said in the first point, customers want to feel special and important. Although they know you have hundreds, thousands, or even millions of other customers, but within their heart, they still want to feel important and remembered. This is the reason why customers love to be recognized by their name in their favorite restaurants, bars, and stores. Even if you don’t reward them with free products, they feel satisfied, just because you know their name.
- Analyze churned customers.
You may never be able to know the reason why customers are churning out of your organization until you ask them. Hence, it is important to conduct a survey on some of your churned customers to know why they left for another brand. When you carry out this survey and analyze the data, you can come up with interesting solutions that help the company and lower the churn rate.
- Focus your attention on your strongest customer relationships.
You can know sometimes when a customer is about churning. They stop doing simple things they usually do such as liking your media posts, unsubscribing from your newsletter, or sent a couple of angry emails. You may begin to panic and through all your resources to those customers to save the relationship, and one of the most employed ways is by showering them with incentives to stay.
But the most advisable thing to do is to pay more attention to your loyal customers; this is a time to send them messages and to check on them. Most customers that churn out are mostly loyal customers, they churn because they feel they are no longer relevant and regarded in the company.