You may have trouble brewing if your churn rate is higher than expected. Poor experiences and unengaged clients can result in more turnover, reducing your revenue and increasing your cost of customer acquisition. However, corrective actions can keep subscribers loyal to your brand. Take steps to improve your customer churn rate and reach your business goals.
Learn why clients churn
Retently reported that 23% of customers churn due to a poor onboarding experience, 14% leave after a poor customer experience, and 16% depart for reasons stemming from a lack of customer loyalty. However, your CRM, help desk, and communications software may highlight other reasons, such as price or unmet expectations. Customer feedback via surveys and polls can help you understand why clients churn. You can devise various tactics to improve customer experiences, such as personalizing your messaging and training customer service representatives.
[Read more: How to Boost Customer Retention and Drive Repeat Business]
Benchmark your churn rate
Where do you stand in comparison to your competitors? Churn rates vary by industry and business model. Benchmarking your churn rate gives you an idea of how you compare to others. You can use benchmarks to set goals and evaluate your progress. According to Recurly Research, Box of the Month clubs have the highest attrition rate (10.54%), whereas software as a service (SaaS) has the lowest (4.79%).
Enhance the user experience and journey
Is your onboarding experience smooth, or do customers frequently call for assistance? Can users easily navigate your website and update their account or billing information? Complete a customer experience audit to understand your clients’ pain points and learn how they interact with various platforms along their journey. A better overall experience can reduce your churn rate while increasing customer satisfaction and loyalty.
Use technology to assess behavior and predict churn
Software tools help you analyze customer behavior and use those insights to take corrective actions. Customer relationship management (CRM) and communications platforms monitor and record interactions, from purchases to customer service calls. Some systems use artificial intelligence (AI) and machine learning (ML) to evaluate customer sentiment and identify keywords signifying a problem.
Speech and text analytics can capture mentions of:
- Competitor names.
- Requests for a supervisor.
- Action words, such as "buy" or "want."
- A specific product or service.
- Negative terms, like "close" or "never."
- Obscenity or profanity.
67% of churn can be avoided if the issue is resolved on the first encounter.
Danielle Ingrao, Fusebill
Likewise, predictive churn modeling uses predictive technology. It looks at historical data about consumer behavior and forecasts the likelihood that a customer will end their relationship with your business. For example, subscription-based companies may realize that people log in to their service less in the weeks before unsubscribing. A predictive model will flag potential subscribers at risk for attrition, allowing you to re-engage them.
[Read more: Investing in Tech: How to Decide on the Technology Your Startup Needs]
Optimize customer service
Customer service interactions impact your churn rate. Indeed, Fusebill said, "67% of churn can be avoided if the issue is resolved on the first encounter." Use analytics to find weaknesses in your response on different channels, such as text or messaging and voice or video calls. Look at key metrics, like first contact resolution (FCR), to find areas to improve. Consider adding an employee knowledge base to speed up your time to resolution.
Boost customer engagement
According to Verifone, "up to 80% of the people that churn are customers with low or no engagement," suggesting that improvements can significantly decrease your churn rate. Grab and keep attention by incorporating engagement tactics in your SaaS app, social media, website, and live events.
Boost engagement by:
- Personalizing your content and offers.
- Offering social-sharing tools.
- Optimizing your services for mobile devices.
- Creating interactive content.
- Providing in-app messaging services.
[Read more: How to Grow Sales Through Customer Engagement]
Develop a loyalty program
Setting up a customer loyalty program is an excellent way to improve your churn rate while increasing revenue. For instance, Comarch found that "running a loyalty program can result in 3.5 times more transactions per member." Adding people to your loyalty program and offering subscription-based incentives can reduce the number of people who will unsubscribe.
Check out these articles for loyalty program ideas:
- 4 Tips for Building Effective D2C Customer Loyalty Programs.
- B2C Customer Loyalty Program Ideas.
- How to Reward Loyal B2B Customers.
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