5 Tips to Reduce Customer Churn
If you've ever been involved in running a business you may have experienced substantial rates of customer churn. This can be a source of despair. Believe me, there is nothing worse than watching a customer leave you for another competitor after you've worked hard to bring them into your business ecosystem.
Even more, churn can also significantly harm a business' bottom line. Obviously it costs money to bring customers into the business through marketing activities and other administrative costs. Churning customers at high rates therefore becomes quite expensive because the return on each customer drastically reduces. This means that businesses need to spend more money on acquiring new faces; an activity that is perhaps more expensive than simply looking after your existing customers.
So, how can you avoid high churn rates and achieve sustainable levels of customer retention in your business? Here are 5 strategies that can help you do exactly that.
1. Reward existing customers through loyalty schemes.
This one is a no brainer. While it might be tempting to focus on bringing more people into the business, this should not be at the expense of not rewarding your existing customers for being loyal to your brand and your mission. Customers like to be valued; they don't like to feel underappreciated.
Loyalty schemes can come in the form of customer discounts or other offers. I'd also consider adding a touch of personalisation to loyalty schemes. This can be as simple as sending a personalised email that recognises how long the customer has been with your business, how you're appreciative of their continuing support, and what discount you have to offer them for their support. Personalisation can go a long way in building genuine customer relationships as opposed to sending an email with a generically worded loyalty program that your customer is likely to skim over in 2 seconds.
2. Have constant customer feedback loops within your business, not just at the end.
Unfortunately a number of businesses only seek customer feedback at the end through customer exit surveys. While important, businesses should not leave it until it's too late to seek feedback from their customers.
That's why it's important to embed continual customer feedback loops in your business so you can get feedback at multiple stages of the customer journey. This way, you can understand what you're doing well and what you need to work on before you customer has walked out the door. If you pivot well, you'll have a much larger chance of retaining customers because you're resolving their grievances just in time. Who knows, this might go very well appreciated and they may be more likely to recommend your business to a friend.
There are several ways to embed continual customer feedback loops. The most common way is to send out optional surveys for customers to complete on how they found your product or service. Unfortunately generic surveys can often become quite exhausting for the customer because they are so ubiquitous; every business is sending our surveys!! This explains why surveys can often have a low completion rate and aren't as helpful as what they could be.
Perhaps a better way is to engage with your customer personally by talking to them on your physical premises or by sending a personal email with an incentive to complete the survey. If you're going to get genuine customer feedback, it's time that you make a genuine attempt to reach out to them. Remember: They're doing you a favour by providing feedback. Honour this.
3. Take customer complaints seriously.
This cannot be overstated. A customer is complaining for a reason. Yes, you may have difficult customers who give you a hard time or who are in the wrong. However, most times your customer will have a point. You need to hear their feedback and get to the cause of the major pain point in your product that your customer is complaining about.
Whenever I first hear a customer complaint my preliminary question is always this: Have I done something wrong? Is there something wrong with the product I've created? Sometimes I may not have done anything wrong but chances are that I most often will have. I always start from the default position that I am at fault. When hearing customer complaints, I withhold my judgement and empathise with their situation whilst gently putting forward my view (if necessary). I ask questions and try to understand their grievances as best as I can; I don't vehemently defend my position.
After this, I then reflect on the customer's feedback and consider it in its entirety. I can discuss the feedback with my team and separate the value feedback from feedback that might not be as pressing. And most importantly, I action as much of the feedback as possible. There's nothing worse than saying that you'll make sure that something 'never happens again' but you don't action it and another customer has a similar experience.
4. Don't be boring; change things up.
Just as you wouldn't go to a clothes store time and time again if they didn't rotate their stock, customers won't stay with you unless they see change. Change can come in a few forms: Change in the form of improvement (discussed above) or change in the form of having new exciting products, events or services to share with your customer.
Fundamentally, customers want to see your business moving forward otherwise they won't think your business is worth their money. No one wants to see a business that only knows how to recycle!!
5. Cultivate the best team possible.
This is perhaps the most important tip out of the five I have provided. Your team interacts with customers on a daily basis far more than you do. They also influence the workplace culture and general 'vibe' of the business whenever your customers interact with it. Your primary investment should therefore be in your team.
Investing in your team is not as straightforward as what people may think. Some might say: "Teach them how to close a sale and how to pitch. Done!" Wrong. Firstly, you need to acknowledge that team members will only give their best when they feel that you have their best interests at heart. If your team doesn't like you or doesn't feel supported, don't expect them to absorb or implement everything you ask them to do.
Secondly, you need to share what your mission is with your team. A common goal keeps everyone united and working together for a common outcome. This will reflect in all peoples' dealings with your customers. For instance, if your mission is to make education more fun, accessible and engaging for university students, you need to share this with your team. It tells them the why behind what you're asking them to do - Why they need to be engaging, innovative and charismatic when teaching their students.
And lastly, reward your team for good work. That way, they'll feel appreciated and will keep striving to do more for the customer. After all, the goal here is to make your passion for your customers and your business also become their passion.
Final Thoughts
On a surface level, reducing customer churn is a matter of rewarding customer loyalty, being exciting and hearing their feedback. On a deeper level, customer churn is indicative of the health of your entire business. You need to have an amazing team to create an amazing atmosphere in your business that will inevitably rub off on your customers.
The world of business is far more complicated than tracking metrics. Although tracking metrics can be of value, what is often infinitely more valuable is the myriad of unquantifiable aspects of your business such as your business' culture and the enthusiasm of your team. These things should never be overlooked!
