What is the Churn? How Can We Handle It?
Churn refers to the number of customers that a business has lost in a period. While businesses are experiencing the situation of losing their customers for many reasons, it is very important to conduct this analysis and reach the reasons for the growth and sustainability of the business. The first salvation plan that you can think of after incorporating the word churn into your life is probably to try to close this gap by acquiring more new customers. However, after this idea, you should also think of the following:
The first issue we can address is that it is not always possible to acquire new customers through natural channels. For this reason, your Sales Department will have to deviate from their routine works to close your Churn gap. This situation will negatively affect both the motivation and daily effort of the Sales Department over time and will cause you to see Churn numbers that do not decrease in the long run and new sales that do not increase.
Secondly, let’s say you have two products of 5 and 10 units in the product items you offer.Let’s imagine that 7 of the customers you have in total use the product of 10 units, and 10 of them use your product of 5 units. If 5 out of 7 people using your 10-unit product are Churn, the 5-unit product sale that you will make to the same number of new customers, i.e. 7, will not close this gap. After an effort made for 7 people, a more affordable product preferred by the customer, a new customer who comes to you as much as the number of Churns you lose, unfortunately, will not make you profitable and also pull you back. In other words, you need to strive not only for the number of Churns, but also for your revenue of Churn. In the long run, again in this scenario, the effort to close the deficit by making new sales will not be healthy and sustainable.
As a result, the moment you realize that you can’t get rid of the word Churn, instead of ignoring it, you should turn to the scenarios about how you can reduce your Churn rates. In order for a business to expand its customer, the growth rate must exceed the loss rate, and in fact the most reliable way to achieve this is to reduce Churn rates and target the retention of acquired customers. In many companies, Customer Success Departments continue by conducting Churn analyzes at certain times, changing or improving customer approaches after these analyzes. These analyzes can sometimes be provided through customer surveys, while sometimes they can be provided by contacting the customer one-on-one.
As Mobiroller, we automate our mail delivery by using the Sendy tool in accordance with the parameters we have determined instead of transmitting our Churn surveys manually. Thanks to tools such as Sendy, you can both reduce your workload and ensure the permanence of the information you will receive. Thanks to NPS, Net Promoter Score, you can measure the loyalty of your customers in a single question and then organize your Churn surveys according to this score to get more effective results.
Last but not least, the decrease or increase in Churn rates is not a topic that can be directly linked to Customer Success Departments. Because Churn represents your fault, not the customer’s, and this fault is not individual. Your mistake may be to attract them by marketing to the not iron personas (Marketing Department), to sell to these wrong personas with promises that are not accurate and transparent (Sales Department), and finally to offer a terrible onboarding process to the new customers you have acquired (Customer Success Department). My point is that; as always, this is a team effort and reducing your Churn rates is a process that is in your hands.
So where can you start to reduce your Churn rates? First you need to find the most important reasons. How to attract the ideal and right customers, you should focus on this:
- Define the ideal persona who will receive your product and service.
- As a Customer Support Department, always work together with Marketing and Sales.
- Set the customer’s expectations before becoming a customer. Be absolutely transparent about the pricing and the service you will provide.
- Make sure that you provide effective, fast, solution-oriented and moderate technical support to your customers.
Do not forget that “Churn is your fault!”
References:
OKRX SUMMIT 2022 -26 May
https://www.iienstitu.com/blog/churn-nedir
EGE AYBÜKE KAYA
MOBIROLLER / CUSTOMER ONBOARDING SPECIALIST
