How to Retain Valuable Customers: You rely on your customers to keep your business afloat. When you have a steady supply of clients coming to your business, covering expenses and growing your company is easy.
However, when you’re dealing with a high customer churn rate, your company’s bottom line suffers.
If you’re having trouble retaining customers, you’re not alone. In fact, most businesses lose 71 percent of their regular customers due to a bad experience.
Luckily, there are things you can do to correct the problem and improve your retention rate for years to come. Here are a few proven churn management strategies to keep your customers coming back year after year.
Look for Reasons Behind the Customer Churn
Though you might not like to think about it, there’s always a reason behind high customer churn rates. You just need to be willing to look at what’s going on both on the frontlines and behind the scenes at your company.
Pay attention to the way your business operates each day. Are there things that have gotten sloppy over the last few months that could be contributing to the churn? Are some of your services missing the mark?
Identifying potential problem areas early on will allow you to create strategies to fix those problems. Over time, you’ll likely see a decrease in the average churn rate and will find it easier to keep and grow your customer base.
Don’t hesitate to ask your employees for feedback. Remember, they’re the ones on the ground interacting with customers and clients daily. They’ll be able to spot problems long before you ever learn there’s an issue.
Identify Your Die-Hard Fans
As a business owner, it’s important to understand who your most loyal customers are. This means looking at the characteristics that define those people.
Make a list of the things your most die-hard customers (those that keep coming back to your business) have in common. This could be anything from a clear and unwavering need for your services or personalities that align with your business’s mission and values.
Look at your recurring monthly revenue levels. Use an MRR calculator to better understand how your business is growing thanks to those die-hard fans that support your business.
You can even ask those customers why they choose your business over your competitors.
Pay attention to what they say and the characteristics they share. Once you have an understanding of how your business serves them best, you’ll be able to better tailor your services for clients that share their needs.
Understand Who Is Likely to Leave
Just as you need to understand the types of people that make up your most loyal customer base, you also need to identify the types of customers most likely to leave.
Take a look at the clients and customers you’ve lost over the last few months. Are there shared circumstances that caused them to move to your competitors? Did the quality of your services slip for a certain subset of your client base?
Once you can answer these questions, you’ll be better able to find methods to reduce the churn rate and keep more clients from turning to your competition.
Give Customers Reasons to Stay
Not all customers swing to one extreme. Some people may even alternate between supporting your business and your competitors’. This means you’re going to need to find ways to win them over and convince them to stay with your brand rather than working with other companies.
Providing incentives to customers who continue to use your services is a great place to start. This could be something as simple as a branded keychain or mug, but it’s almost always better to create a discount program.
When customers support your company several times in a row, consider offering them a discount on future purchases. It doesn’t have to be a huge discount—just something to show them that you appreciate their support.
Once word gets out that you’re offering these incentives, more customers will be willing to continue to support your brand, thereby reducing customer churn rates across the board.
Listen to Feedback Even If It’s Critical
The most common reason that customers leave is that they’re unsatisfied with the quality of the services you provide. In most cases, those dissatisfied customers are more than happy to discuss their experience with you. Use this to your advantage.
Follow up with disgruntled or dissatisfied customers and find out what happened that turned them away from your company. Listen to that feedback even if it’s critical. You can use that information to improve your business and make sure those problems never happen again.
Even better, it shows your clients and customers that you care and are willing to listen to their concerns. You might even win a few back just by listening to their opinions.
Reevaluate Your Pricing
Unfortunately, many customers actively look for bargains no matter what types of services you offer. If you price your products or services much higher than the competition, your customers won’t have a reason to stay.
If you’re seeing an increase in your churn rate, take a look at your pricing and compare it to the prices your competition advertises. If they’re offering the same or similar products at a lesser price, you’ll need to adjust your prices accordingly.
Over time and as you win customers back, you can reevaluate your prices and adjust them back up within reason.
Follow These Churn Management Strategies
Keeping customer churn rates down can seem daunting, but it’s vital for your business’s success. Start implementing these churn management strategies in your business now.
The sooner you do, the easier it will be to correct problems in your company. Just remember to be patient. Fixing a problematic churn rate takes time, but once you do, you won’t have to worry about hemorrhaging clients every week.
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