Churn is a silent killer to a business’s bottom line. As a customer is acquired, that customer brings momentum to a business’s growth goals. But a few months later, that customer may have slipped quietly away from the business. That momentum from acquiring that customer quickly turns into an uphill battle for the business to retain customers and maintain growth.
Why do customers leave when everything was fine?
We’ve all sat at our desks, quietly working away, late at night, only to receive a cancellation email. Suddenly the unknown has arrived at our door, and we’re left wondering what went wrong.
There is more to retaining customers than tying them down to a long-term contract. Businesses need to understand the reasons behind customer churn, create value at every interaction, and stay in contact long after the initial sale.
Understand why customers leave in the first place
Customer churn tends to occur as a result of a series of minor factors that individual customers may perceive slightly differently. Therefore, it is essential to identify the root causes of customer dissatisfaction in order to solve problems that would otherwise continue to exist.
Honestly, it rarely happens overnight.
To learn where problems are occurring, businesses must find ways to get feedback from their customers before they leave for good. For example, businesses can use their customers’ usage data to track for signs that a customer is falling out of love with a service. For example, a business might track a decrease in login frequency or a decline in the use of certain features that are especially valuable to the business’s customers. In addition, businesses can use surveys, exit interviews, and even regular check-ins with their customers to gain insight into the problems that are causing customers to leave in the first place.
By conducting direct outreach with customers, through means such as short surveys or exit interviews, or even just checking in with them from time to time, you can get a wealth of information and gain insight into problems with your product or service. Again, this takes a lot of humility to set up and then listen to feedback without getting defensive, but it will provide you with a roadmap to improve and retain customers.
Focus heavily on the onboarding experience
The first impression a customer gets of your service or product determines the rest of the relationship. If a customer feels they haven’t been given enough guidance during their first week of using a service or product, they are more likely to churn within the first 6 months.
Is your onboarding setup actually guiding users, or is it just getting in their way?
Onboarding needs to let customers complete simple steps first so they can realize value quickly, which in turn creates a strong foundation for long-term customer loyalty.
By making the onboarding process smooth and providing clear tutorials and support to the customer during this time, you can create a strong foundation for long-term loyalty with your customers. A customer who receives a good onboarding experience and can start to receive value from your product/service quickly will become confident in your brand.
Keep the relationship active beyond the sale
Sustained customer retention requires continuous engagement.
Thoughtful communication between transactions of value helps keep the customer engaged and attuned to your brand. If you develop a strategy around communication between transactions of value using the right lifecycle marketing platform, then it’s possible to automate communication in a personal manner that is fit for purpose. This approach ensures that customers receive the communication they need at the time they need it.
But automated tools are only as effective as the intent behind them.
When customers feel supported throughout their journey, they stop viewing your product as just another line item expense. Instead, they will begin to view your company as a trusted partner or even an essential part of their daily lives.
Provide proactive customer support
The typical support interaction is reactive in nature – i.e., the customer has a problem, they open a ticket, and then wait for someone to respond to their issue. All the while, they are getting more and more frustrated as the minutes turn into hours.
What if your support team stepped in before the customer even realized something was wrong?
Proactive support is totally different from traditional support. Instead of waiting for a customer to have a problem and then dealing with it after they’ve contacted support, you can anticipate problems before they occur and deal with them before they affect your customer. You can have a huge amount of value in support for a number of things such as self-service support (i.e. a customer support website where customers can get answers to their problems without having to contact support), a knowledge base, and automated support (i.e. support that is triggered by automatically by a customer’s usage of your product, such as by the occurrence of a technical problem).
I find that offering assistance to customers before they even think to ask for it is incredibly good for you. You are showing them that you value their time above and beyond all other things, which gives them huge goodwill towards you and your organization.
Build a culture centered around customer success
This has to become a part of your organization’s culture; therefore, it is also the responsibility of every department. Product needs to be developed with users’ daily problems in focus. The sales team must not promise more than what the product can deliver. Leaders need to prioritize long-term relationships with customers versus short-term gains.
So when every department at your business is striving to deliver value to customers on an ongoing basis, reducing customer churn becomes business as usual and ceases to be a crisis.
Churn is always going to exist to some degree, but it does not have to dictate your growth. By listening to feedback, perfecting onboarding, regularly engaging with customers, and providing support, you can build a loyal customer base and create a solid foundation for growth.
This content is provided for informational purposes only and is not a substitute for professional advice. AFP editorial staff were not involved in the creation of this content.
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