Want to grow your business and remain successful? A good place to start is ensuring you retain your customers by keeping your customer churn rate low.
Research has found that acquiring a new customer is five times more costly than retaining an existing one.
And yet, too many companies are seemingly unprepared to understand the reasons why customers leave – and what they need to do to retain them.
In this guide, we’ll take a deep-dive into customer churn, get a better understanding of why customers leave, and provide helpful tips around how you can keep your top customers year in and year out.
Read on for our guide on reducing customer churn.
Customer churn is also known as customer attrition and happens when a customer chooses to stop using your products or services, often in favour of one of your competitors.
Customer churn rate is the rate at which customers are leaving you, usually measured over a set period of time such as a month, financial quarter or year.
Keeping your customer churn rate as low as possible has immense benefits. Data shows that increasing customer retention by a mere 5% can increase profits by 25%-95%.
One of the reasons is that existing customers are far more likely to buy from you than new customers. In fact, the success rate of selling to an existing customer is 60%-70%, compared to a success rate of only 5%-20% when selling to a new customer.
To reduce your customer churn rate, you first need to understand what causes customers to leave you in the first place.
The are many reasons why you’re seeing your customers leave and your churn rate increasing. For the purposes of this article, we are focusing on four main causes of customer churn, namely:
Sometimes, the obvious answer is the correct one. Customers may be leaving you for the simple reason that they don’t feel valued. Maintaining high levels of customer service is essential in today’s economy. When customers feel valued, they’re more likely to remain your customer, spend more with your business, and recommend you to friends and family.
Directly linked to customer service is the concept of customer experience. Analysts long predicted that customer experience would one day overtake price and product as the main driver of purchasing behaviour. That time has arrived. The best companies today use new data-driven tools to measure, manage and improve their customer experience at every touchpoint.
This is also linked to customer service and the quality of your customer experience. Many companies simply don’t understand their audiences very well, leading to a growing disconnect between customer expectations and what you offer them. Using data tools can close this gap by giving you measurable data about key customer attributes to help guide your interactions with customers.
Sometimes the deal you’re offering customers just isn’t as good as what competitors are offering. This holds especially true for renewal offers, where competitors may offer amazing deals to new customers that entice them away from your products or services. Developing the kind of renewal offers that you simply can’t say no to is one step toward limiting customer churn during the renewal stage.
As much as you’d like to retain every customer and avoid customer churn, it’s impossible to do that when you can’t keep track of which customers are leaving and what your customer churn rate is.
Often there are some clear signs indicating customer churn, including:
Keeping track of operational data such as the number of repeat purchases and how much each customer spends can point to potential customer churn.
If you suddenly see a drop in the way customers measure the customer experience when dealing with your company, you may be in danger of churn. Keeping track of each customer’s Net Promoter Score and matching that with operational data can help flag potential churn and give you a chance to repair the relationship before the customer jumps ship.
Don’t stop at your Net Promoter Score: companies now have access to data tools that track the customer experience across every touchpoint, and provides measurable data into how customers are experiencing your products and services at every step of their journey. The insights produced by these data tools can reveal important trends about what customers do and don’t enjoy about interacting with your company.
Want to reduce your churn rate and retain your customers? It’s not just about pulling customers that are about to leave back from the brink. Used wisely, your efforts at reducing your customer churn rate can also repair the conditions that lead to customers leaving in the first place.
Here’s how you can reduce your customer churn rate:
Customer experience is one of the best investments you can make, not only for reducing customer churn but for attracting new customers and encouraging more purchases and higher-value purchases from existing customers.
Loyal customers are less likely to leave and more likely to recommend you to others. Having a system in place to reward loyal customers is a great way of deepening loyalty to your products and services.
Want to convert a customer into an ambassador for your products and services? Ensure you have a clear view over your top customers – you know, the ones who have spent and are likely to continue to spend more with you than most other customers – and recognise them with personalised offers and communication.
Email analytics is a method of tracking various statistics and data points associated with email activity.
Typical email analytics include the number of emails sent and received, average reply times, email traffic by time of day or day of the week, and top senders and recipients.
Organisations using email analytics to track their teams’ email performance gain greater insight into their email strategies for customer service and sales. This enables organisations to use actionable intelligence into email activities to bring improvements to their sales and customer service efforts.
Email analytics can unlock a broad range of benefits for customer-facing teams that can improve service levels and help reduce customer churn, including:
If the customer is king in your organisation, the minimum you can do is acknowledge, respond to and take action to quickly resolve their inbound emails and customer service requests.
Having email analytics software in place can help you keep track of inbound email and reply times to help you resolve customer queries quickly and efficiently. And that naturally leads to happier customers.
One of the best ways to drive customers away is to ignore their requests for assistance. While no high-performing customer service team would want to miss a customer email, the truth is many teams receive such a large volume of mails that it’s nearly inevitable that one will go astray at some point.
With an email analytics software solution in place, however, teams and individual agents can be alerted to any emails that have not received a response within a suitable timeframe. This helps you keep track of every incoming mail and ensures each customer receives the care and attention they deserve.
The sheer volume of emails most customer service and sales agents receive on a daily basis means high levels of productivity has never been more important. But improving productivity is at best a hit-and-miss affair without access to data that benchmarks performance and highlights areas of improvement.
Implementing Outlook analytics software or a solution to provide email analytics for Gmail ensures you have access to accurate productivity and performance data from your most important customer communication channel: your email.
Retaining customers is essential to any growing business. The cost of acquiring new customers is so much higher than retaining existing ones that every company should do all it can to limit customer churn.
Understanding why customers are leaving and identifying potential weak spots in your customer experience can provide invaluable insights that can help you better meet customer expectations. This in turn improves retention, drives loyalty, and grows your recurring revenue.
As one of the most important touchpoints in the customer journey, email is essential to the smooth running of any customer-focused business. But most email platforms simply lack the native capability to track and measure email analytics.
Enter timetoreply, the only email analytics software that easily integrates with any email platform and generates actionable insights into email productivity within minutes.
Our plug-and-play solution supports high-performance sales and customer service teams, helping them keep track of email reply times and ensuring no important email is left unanswered.
If you want to experience the power of email analytics in improving your customer experience, why not try timetoreply for a free 15-day trial?
Get in touch with our team today to unlock the power of email analytics in driving greater customer loyalty and reducing customer churn.
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