5 Proven Strategies to Reduce Customer Churn Rate

Your customer churn rate is an excellent way to tell how your business is dealing with its customers. Even though every company would like to have a 0% churn rate, in reality, this is impossible. But, what is very doable is to keep this rate low enough so that it doesn’t affect your success. It isn’t an easy road, but mind that just a 5% increase in retention rates can in return increase your profit by 95%. So, what are you supposed to do in order to stop losing customers and start retaining them?

1. Have an Outstanding Customer Service

When it comes to customer service we really mean it to be outstanding. The reason behind is simple: poor customer service is the number 1 reason why 89% of customers move on to work with a competitor brand. Furthermore, 47% of consumers would recommend a business to others if it provided better customer service.

Customers want to feel appreciated. Even more, they want to see how their opinion is bringing value to your product and service. Responding to feedback is a great start, but if you want to go ahead with your business, you have to do better than you did previously. Here are a few steps to consider:

• Follow-up.
  Most of the time that you’ll hear from your customers is when they have some sort of a complaint. Instead of waiting for that to happen, reach out to costumers and ask them about their experience with your product or service. You can easily do this by sending follow-up emails after they’ve subscribed. Let customers know that you are here for them. Additionally, send emails even after you’ve resolved their problem to see if everything goes smooth now.
• Personalize the messages.
  Personalization is the key to establishing a great customer relationship. It shows customers that you took the effort to familiarize yourself instead of sending a one-fits-all kind of email. Using customer data can do wonders for your revenue. Almost 79% of consumers are more likely to engage with an offer if it is based upon the previous interactions they had with your business.
• Have a Human Approach
  Don’t just respond automatically or give a generic response. To level up the human approach, have a dedicated customer representative and bring this to focus when talking to complaining customers. Seven out of 10 consumers appreciate having the same representative when interacting with the company.

You know the saying: prevention is better than cure. By encouraging communication not only you will establish a good customer relationship, but you will receive some genuine insights about your product or service by the people who use it — and they’re the best source if you’re willing to improve.

2. Prove Your Value to the Customers

Just because a customer subscribed to your email list, or bought your product or service doesn’t necessarily mean that they will always remember your value as a brand. In fact, proving your value to customers is something you should do regularly so that they don’t forget what is it that makes you special compared to the competitors. If this is what causes your customer churn rate, here are few tips for preventing:

• Highlight the features
  You can do this by sending automated emails in which you remind the users about the main features of your product or service and how they can bring value to their life.
• Share informative content
  Create infographics, templates, tutorials and other informative content that would present your company’s value and core features in a design-wise way.
• Send case studies
  Everyone wants to hear success stories, so if you have few to share with your customers, it would be great. If you have more to tell, decide to send weekly or monthly case studies that involve your product or service.

The competitive market is way too strong to not remind your customers of your value. This is where a lot of companies don’t put enough effort. They make it very easy for their competitors to steal the customers. Highlight your value and your customers will come back at you. Customers will remember your value and what it can do for them.

3. Improve Your Onboarding Process

The onboarding process is the most crucial timeframe for retaining users. It is the first interaction a user has with the app. If you don’t impress the users in the first 20 seconds of onboarding, then you’re going to face serious customer churn.

Your onboarding can lack many things. But, from our experience, this is where companies go wrong, and what they can do right:

• Explaining the obvious
  The users have already interacted with so many different products and services that it’s hard to impress them. Because of their vast experience, don’t explain the obvious functions that are almost universal for every product or service. Instead, focus on what makes you unique and what good it can bring to your customer’s life.
• Instruct on-the-go
  The users will need your guidance when they start using your product or service. The best way to help them is to guide them as they’re using the app. Presenting all the possible scenarios in one step can result with the users not knowing how to use a certain feature because the instructions were shown way too early.
• Requesting permission too early
  Asking the customers to grant you access to a certain feature on their device can make them withdraw. But, this happens if your request takes place as soon as they start using your product or service. So, first, show them how they can benefit from you, then ask for permission.

It’s going to be hard to prove customers how great you are if they can’t see that right from the start. That’s why the onboarding is all about impressing your customers. In order for them to come back, you have to prove yourself to them at the very beginning. First impressions matter and they will certainly help you in preventing the customer churn rates to increase.

4. Reward Loyal Customers

One of the best ways to reduce customer churn is to build a solid base of loyal customers. This is done by continuously investing in the relationship you have with them. There’s a good reason to do so. Loyal customers spend 67% more than new ones, and they are 4x likely to refer. Here are a few ways you can start investing in loyal customers:

• Give discounts
  It’s hard to resist a good price reduction! Offering discounts is a great behavior-based trigger to boost your profit. For example, every time a loyal customer’s subscription is about to end, you can offer them a discount so that they extend their subscription.
• Send Freebies
  Research throughout your niche. What do your (potential) customers like? Creating a customer milestone where the customer is awarded each time they reach the milestone is a great way to turn them to loyal ones. They will feel motivated to come back because they will know that eventually, they will receive free stuff.
• Offer loyalty program
  Another way to keep your loyal users motivated is to offer them a referral bonus or reward. This means that every time a customer successfully recruits new customers, you give them a bonus or reward. This could mean money, discount, courses, books, etc.

Customers want fun experiences, so make sure to make this happen for them occasionally. Rewarding is cost-effective, but in return can significantly boost your profit and lower the customer churn rate.

5. Create a community

Creating a community that would revolve around a certain product or service (or even your brand in general) takes time. However, once you build the community, it can seriously strengthen your market position and help you with maintaining a low churn rate. Again, it’s all about having a group of loyal customers who will spread the word for you, and in this case, they would discuss it with each other.

Building a community needs a whole marketing strategy, but we’ll pinpoint some of the factors to consider in the making process:

• Host contests and giveaways
  Contests and giveaways can bring so many benefits to your business. They can boost engagement, help you build a bigger email list and ultimately if the contesters had fun, it’s very likely they will refer you. Make sure that the award you give is appealing to the customers of your niche, and to be something of social sharing power.
• Use gamification for user engagement
  Gamification tactics work well for two reasons: they help to grow a bigger community, and second to motivate the customers to be part of it once they sign up. One of the best gamification methods for increasing user engagement in communities is to come up with avatars and badges. These would be based upon the activity of the user. For example, in order to rank the highest, the user has to achieve a certain amount of activity or to do a certain activity, such as, for example, liking you on social media or inviting a friend. It’s a good idea to implement the peer-review model and allow the users to review and rank each other as well.
• Encourage interaction
  It’s in your favor to keep the customers talking. This way not only you’re encouraging engagement, but by exchanging experiences and ideas the customers can turn from regular to loyal. For example, if a customer is facing a problem with a product or service of yours, they can check out the community and find their solution there. Knowing that they have a place to turn to when faced with a problem is a reason more for them to continue being a customer instead of ending terms with you.

The community is a place about the customers, not about you. Make the community customer-oriented and let them know that it’s a place where their experience with the brand is leveled up. Community-building is a process with many ups and downs. But, in the long run, it can seriously help in lowering the customer churn rates, among many other benefits.

Conclusion

In many cases, customer retention is overlooked. Sooner or later, many companies come to the realization that they can’t be forever in the acquisition mode. Ultimately, it’s all about making your customers satisfied enough that they don’t end terms with you.

With the right approach, you’ll reduce your customer churn rate by converting one-time consumers to loyal customers who will keep coming back to your brand regularly. This way not only you are avoiding a serious customer churn rate, but you will also build a steady workflow where the business’s goals are realized and the customers are happy.

We, at Alite International, have been working with multiple large organizations in supporting their move towards full marketing automation & executing cross-channel marketing strategies. If you need any additional information, do not hesitate to send me an email on kiril.jakimovski@alite-international.com. Or you can visit our website and read more: https://alite-international.com/.