Customer Revenue Leak: Here Are the Possible Drivers to Look for

0
65

Share on LinkedIn

Customer churn is due to several factors, such as poor customer service, ineffective marketing strategies, and stiff competition. High customer churn can result in significant revenue loss and impact the company’s reputation, among many other repercussions. While there is no lack of reasons why customer churn is prevalent, below are the tangible ones subscription companies can start to address to minimize it.

Poor customer service

Poor customer service is one of the most common reasons for high customer churn. According to research by SQM Group, 86% of customers expect their issue to be resolved on the first call, which doesn’t usually happen. Each time a customer must call back because their prior issue was not resolved, customer satisfaction drops, on average, by 15%. Customers are more likely to switch to competitors if they receive subpar customer service. A customer who feels neglected, unheard, or undervalued is unlikely to return to a business.

A survey conducted by NewVoiceMedia found that poor customer service resulted in the loss of $75 billion (about $230 per person in the US) annually in the US alone. To address this issue, you should prioritize training your customer service representatives on effective communication, empathy, and problem-solving skills. Additionally, you should leverage technology to improve customer service – for example, chatbots and self-service options that provide quick and efficient solutions.

Lack of personalization

Another significant factor contributing to high customer churn is the unmet need for more personalization. Customers today expect businesses to offer personalized experiences that cater to their unique needs and preferences. A survey conducted by Accenture found that 91% of consumers are more likely to shop with brands that recognize, remember, and provide relevant offers and recommendations. You should leverage customer data to create personalized experiences that meet your customers’ needs and preferences. This can be achieved using customer data to personalize marketing campaigns, offers, and recommendations.

Lack of understanding of customer needs

While a business may offer high-quality products and services, to retain its customers, it needs to cater to the needs and preferences of its customers. This can result from insufficient market research or not analyzing customer feedback effectively. You should conduct regular surveys and engage with customers to understand their needs, preferences, and feedback. By doing so, you can tailor your products and services to meet your customers’ needs better.

Failure to provide consistent customer service

Consistent customer service is critical in retaining customers. Customers expect reliable and prompt service from the providers. However, a business failing to provide consistent customer service can lead to a high customer churn rate. This can be due to a lack of resources, inadequate training of staff, or needing the right tools and systems in place. Therefore, consider investing in providing adequate training to staff and using technology solutions, such as chatbots and customer relationship management (CRM) software, to streamline communication and provide consistent service to customers.

Failure to meet expectations

Customer expectations constantly evolve, and businesses needing help keep up may need help retaining customers. Customers expect companies to provide personalized experiences, transparent pricing, and timely and efficient service. A business that fails to meet these expectations may lose customers to competitors who can offer better experiences. Hence you should engage with your customers regularly to understand their changing expectations and adjust your strategies accordingly.

Ineffective marketing strategies

If you fail to engage your customers, you will likely lose them to competitors. Marketing strategies that are too generic or lack relevance to the target audience may not attract or retain customers. Businesses should invest in effective marketing strategies that engage customers across various channels, such as social media, email, and mobile. Companies can create targeted campaigns that resonate with their customers and drive engagement by leveraging data-driven marketing strategies.

Reactive retention strategies

Waiting for a customer’s renewal term to end or their decision to cancel slashes the chances of retaining the customer significantly. Churn happens due to poor customer care interactions, multiple substandard experiences, and competition counteroffers, which drive the customer to lose interest in the company.

The sad reality is that most customer retention solutions are reactive. It takes a series of lousy customer interactions or a lack of solutions for a customer to cancel. When companies realize and reach out, it is often too little too late.

Tracking a customer’s behavior throughout the lifecycle enables you to solve many potential cancelation drivers by intervening proactively. This also reduces the cost of service and maintaining a customer. This leads us to another aspect,

With the tangible factors above, this is an opportunity for businesses to improve their approach to customer churn and evolve their retention strategies by understanding customers more and utilizing the existing sources to serve them efficiently.

Image Source: Adobe Stock

Raviteja Sidda
Raviteja is Digital Marketing Manger at VOZIQ AI. VOZIQ AI is the only cloud-based predictive retention solution that leverages sophisticated AI that is powered by 10+ targeted machine learning models to enable recurring revenue businesses to predict customers who are at-risk of cancellation and prevent the cancellation by driving large-scale actions through contact center customer care, marketing and field channels. VOZIQ AI’s solution significantly cuts time-to-value in industries such as home security and automation, pest control, home warranty, energy providers, telecom, and insurance.

ADD YOUR COMMENT

Please use comments to add value to the discussion. Maximum one link to an educational blog post or article. We will NOT PUBLISH brief comments like "good post," comments that mainly promote links, or comments with links to companies, products, or services.

Please enter your comment!
Please enter your name here