There are many components of a business that are necessary in order to function properly. However, there are also numerous components that can contribute to a business’ collapse. There is perhaps no greater detriment to a company’s bottom line than customer churn.
This is a phenomenon in which many customers cease to do business with a company in a condensed period of time. There are many reasons for a customer to stop transactions, but the company can avoid this with some simple, powerful steps.
Improve Customer Service
All it takes is one poor customer service experience to make a customer unsatisfied. If there is a certain issue and if the company is at fault, the customer will expect a swift and reasonable solution. They will not wait around for a problem to be fixed. Businesses should acknowledge faults, treat the customer with respect and find a swift remedy.
Businesses can also incentivize their customer to stay. Not only does this show the company values it’s customers, but it can help strengthen the relationship to the point where leaving would be very hard to do. Of course, the costs of implementing special discounts or offers should be weighed against the cost of what it would take to replace a customer. If it’s too expensive, consider marginally lowering the offer or finding a cheaper alternative.
Identify Risk Groups
Companies also need to find out who has the greatest risk of leaving so that proper interventions can be implemented well in advance. This risk group can vary, but people who haven’t been contacted in a while, haven’t made a purchase in some time or didn’t renew a subscription are some examples. Once this group is identified, a company can devise a plan to retain them.
Educate The Customer
This is one of the most important steps for a business to take because there are many elements incorporated into this step. Educating the customer entails building upon a relationship that should have already been established. A big reason why people leave a company is because they are often not clear of all of the attributes of a signature product or service. A lot of this confusion is exacerbated by a lack of adequate instruction or demonstration. Everything from service descriptions to video demonstrations should be considered so that the customer has a good knowledge base of what a company can offer them. If this is not made clear, you can expect churning rates to rise at a fever pitch.
Analyze Why Churn Is Happening
The first rule of analyzing customer churn is know thy culprit. You can convince customers to stay by incentivizing them and targeting certain groups, but ultimately, a company has to find out why customers are leaving. There may be certain isolated cases, but if there is an uproar in dissatisfied customers in a specific time period, there is likely a common denominator. Is it unsatisfactory pricing? Is it the customer service? Did the company make an unpopular decision? Whatever it may be, the cause should be addressed hastily.
Churning is a situation that all businesses should strive to avoid. This can devastate profits and ruin a company’s reputation in the process. With these expert tips, any business will be in a better position to combat rising churn rates.