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How to Reduce Customer Churn

Amber Hadley Posted by Amber Hadley on December 21, 2018

How to reduce customer churnNo one likes being left behind - especially when the person leaving is your customers. Losing customers is a difficult part of any business, especially considering that getting new customers is much more expensive than retaining existing ones. Not only does it reduce your revenue, customer churn is frustrating and perhaps even discouraging.

People leave for all sorts of reasons, and you can’t control everything. The good news is that while you can’t completely stop customer churn, there are certainly things you can do to reduce it. We’ve compiled some strategies that can help you analyze and significantly reduce the rate of your customer churn.

Find out why they’re leaving

First of all, find out why you’re experiencing churn. Take a peek at your company analytics and find out the rate at which customers are leaving. Pull some reports and analyze some of the reasons why you’re losing customers. We mentioned before that you can’t stop everyone from leaving, and that’s true. But the first step in reducing churn is to figure out why it’s happening and where your biggest pain points are. Customers leave for all kinds of reasons and it’s a good idea to look at your own metrics and figure out, for your company, what those are.

One way to do this is to ask that customers who do leave give their feedback through comments or questionnaires and tell you why they’re leaving. If you haven’t been doing this already, start implementing it now. Find a way to request that customers tell you why they’re heading out and start compiling the data. This will also give you a good baseline to measure your success as you start implementing some of these churn-reducing strategies.

One other metric to look at is the timing of the churn. Did you know that most apps have a 20% churn rate after 90 days? It’s true. Looking at when your customers are bailing can give you good insight into a major paint point. Which leads us to our first strategy to reducing churn: onboarding.

Focus on your onboarding

Making sure your onboarding sequence for new customers is perhaps one of the best ways to instantly cut down on churn. One of the top reasons that customers leave is if they’re not quite sure how to proceed with your product or service. If they don’t know how to use it right away, or if they’re confused about it’s features or aren’t sure how to get answers, they’re more likely to get frustrated and leave.

So what does a good onboarding sequence look like? Here are some key elements that you’ll want to include to make sure your onboarding process is seamless and gets your customer engaged right away to reduce frustration and, ultimately, churn:

  • Simplicity - Make all aspects of your onboarding process simple, clean, and concise. If there are too many steps or it’s too involved, customers are more likely to give up right away or stop the process and walk away - possibly never to come back.
  • Highlight key aspects of your product - Show off a little! Show a few of the most commonly used, helpful features of your product. Don’t overwhelm them with every feature, but direct them to the most used features - especially where to go for help.
  • Baby steps - Break the process down into simple tasks. Ask for the least amount of information you need upfront - you can gather more information later. Make the process to get set up and using your product simple and easy. Break down each step so it’s as easy as possible.
  • Set clear expectations - Make sure your customers know exactly what they’re getting into. Throughout the process of getting your customers set up, make sure they know what each step entails and what your product does. The clearer and more concise the better.
  • Send a welcome email - Sending a welcome email is also incredibly important. It’s another way you are connecting with your customer and a great chance to give more information and let your customers know where to go if they have any questions.

Making sure that your onboarding is excellent is a quick way to reduce churn. This ensures that your customers are set up and introduced to your brand. When your customers have a successful onboarding process and start using your product right away, they are much less likely to churn.

Communicate frequently

Once your customers are set up with onboarding, don’t stop communicating with them. Frequent follow-up is key to making sure your customers are getting the most out of your product. The more engaged they are with your product they are, the less likely they are to churn. One company who does this really well is Duolingo. They send frequent notifications and emails updating users on their progress and reminding them if they haven’t used their product in a while. Send emails and other types of notifications regularly to make sure you’re in your customers’ minds and to give them reminders and updates about your product.

Communicating with your customers is a great way to get creative. You can communicate with your customers by sending product updates, reminders, ask for feedback, or simply to thank them. Depending on your brand’s product and platform, you can use a variety of methods to communicate as well. Email is always a classic, but you can also use in-platform notifications and messages or texts. Whatever works for you, staying in touch is key.

Seek feedback

Related to frequently communicating with your customers, make sure you’re also seeking their feedback. This helps you in two ways: it builds trust and it helps you learn more about what your customers want and value.

Customers are much more likely to stay if they feel listened to. Asking for customer feedback is a great way to show them that you care about their experience and are willing to listen to what it is they want to get out of your product. Additionally, getting specific feedback through well-designed surveys or comments will help you learn more about why customers are churning - and why they’re staying. This will give you valuable information on both your strengths and your pain points. This will help you make sure that you’re constantly improving your company.

Reward your customers

Who doesn’t love to be rewarded? Using loyalty programs, promotions, and sales to reward your customers for staying are a great way to reduce churn. It’s a relatively low cost for keeping you and it keeps your customers coming back. When you reward your customers with incentives or discounts, it shows them that you value them choosing your brand.

Customers want to know that they’re valued by you. Showing your gratitude by thanking them and creating incentives also builds their trust. It reinforces the value of staying with your brand and using your products.

Customer churn is not ideal. While it can’t be totally avoided, the strategies outlined above will go a long way in helping you reduce the rate of customer churn. These are all strategies that you can implement right away. As you do so, continue to analyze your results and learn more about your particular customer base. Use that data to grow and improve and watch your customer churn plummet and your customer loyalty increase.

Topics: Customer Service

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