Customer churn is a normal part of doing business. ‘You win some, you lose some’, has been every business person’s mantra forever, but the reasons customers churn are so diverse that is may take a while to understand. Nearly all departing customers fall into two buckets: voluntary churn and involuntary churn.
A person who stays 12 months or longer can be considered a long-term customer; avoid upsetting him, offer enhancements from time to time, don’t be afraid to send out a ‘thank you’ email every now and again – keep him happy. This is the exact customer churn you want to avoid. Many customer retention service providers suggest leaving these people alone entirely, but I recommend monitoring them over the long-term. It’s far easier to nip a small problem in the bud than luring back an old customer. Settling for happiness today can lead to obsolescence and frustration tomorrow.
The most efficient way to manage churn is to select a customer retention solution that flags churn risks. Predictive churn systems, for example, can provide a probability (0-100%) that somebody will churn in a defined period—say, one month, three months, or one year.
You can decide whom to focus on, but a good rule of thumb is to actively target clients above 75% likely to churn within the next three months. By zeroing in on high-risk churners, you can identify why they’re high-risk, and address them accordingly. Often, the reasons are simple—maybe they just turned off auto-renewal, in which case you can remind them to re-subscribe at the most propitious time.
Involuntary churn, because it doesn’t result from unhappy customers, is easiest to fix and therefore should be prioritized. Much if it is because your machine talks to another machine, rather than have real people averting errors – such as an automatic subscription and a bank, or e-commerce site and a payment company.
Your retention solution should directly target the culprits of involuntary churn; whichever solution you choose, look for the following options:
Simply implementing a solution with those options can reduce your churn by up to 50%.
To mitigate voluntary churn on an ongoing basis, stay plugged into your editors, users, and anyone minding a consumer touchpoint. Find out when, and why, people most often voluntarily churn. It may be because they called tech support a few times for an issue. Or maybe they liked some things you offered, but not everything. A slew of factors can coalesce to produce voluntary churn.
Regardless of how much a customer is spending with you, she is entitled to assistance. Newer customers, especially those in the trial period, should have frictionless access to support without having to work too hard. Such access will make them feel valued.
Whether you dedicate a portion of your site to case-study or Q&A videos on how to achieve certain tasks, or you create a forum for sharing tips, help your customers to maximize the service experience on their own.
Maybe you do so through reviews, surveys, or a special alpha test groups. However, you do it, being a good listener is the key to successful software and product updates. Each improvement is a chance to address issues that your clients have flagged for you.
Successful companies should grow organically alongside their market. Evolving along with your users—and surprising them by rewarding their loyalty – will dramatically decrease churn as you both grow. Preventing customer churn is good for you and the customer, using these tips should keep everyone happy.