How to Reduce Customer Churn & Improve Business

  • 5 years   ago
There are many components that are necessary to ensure the success of a company. However, if there is one thing that businesses should strive to avoid at all costs, it is customer churn. This happens to be one of the more prolific problems across many companies, and this can lead to a rapid decline in profits and customer engagement. Fortunately, there are tactics that a company can utilize in order to reduce this phenomenon. In order to understand how to avoid the potential problem, learning about the actual problem is crucial.
What Is Customer Churn?
This term is used to describe a situation in which customers have ceased their relationship with your company and refuse to do business. In order to calculate the specific rate of churn, you can find this number out by dividing the number of customers that you lost over a fixed time period by the number of customers that were with the company at the beginning. Ideally, you will want to have this rate near or at 0% at all times. Therefore, it is important to monitor the churn rate very frequently.
Churn can take place for a variety of reasons. It can range from general disinterest in the product to a poor customer service experience. Regardless of the culprit, this is a situation that all businesses should strive to avoid because of the massive damage it will place on the company's business and reputation. 
Fortunately, there are a variety of methods that can be implemented in order to curve this phenomenon. In order to improve your business and reduce high churn rates, follow the following tips.
Show Customers That You Care
Customers love a productive relationship with the business that they are giving money to, but they also want to have the feeling that you have their back and that the business cares for their satisfaction. This is why it is imperative for companies to establish a strong rapport from the moment a relationship is established and continue to strengthen that relationship over time. 
Consider methods that take on a more proactive approach and showcase concern for the customer. This can be something as simple as changing the header in the emails that you send out. Personalize those emails instead of putting out a typical promotion that portrays the company as just wanting their money. You should also take feedback, whether positive or negative, very seriously. Use those comments to implement real change. 
Analyze Churn as It Takes Place
One of the most important things a company can do when it comes to controlling churn rate is to analyze why customers are being lost to begin with. Action needs to be taken the moment where it is being noticed that a great deal of customers are being lost over a fixed time period. More importantly, the reason why churning rates are increasingly rapidly needs to be analyzed. Is a product defective? Has customer service been declining? The culprit should be sought after and an immediate solution should be found before the churning rate becomes dangerously high.
Focus On Loyal Customers

This is not to say that a company should play favorites and only focus on a certain demographic. A business should strive to remain in the good graces of all of its customers. However, if churning is taking place, a priority should be placed on retaining your best customers. Resources should be pooled together to ensure that loyal customers are satisfied and that they will not become a part of the statistic.