What Are the Best Ways to Reduce Customer Churn?

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Customer churn kills businesses. It’s on you to calculate your customer churn rate, identify the root causes of your customer churn, and ultimately reduce that rate if you want to survive. But how exactly does customer churn manifest, and what are the best ways to reduce it?

What Is Customer Churn?

Let’s start with the basics: what is customer churn? Customer churn typically refers to the percentage of customers in a given time period who unsubscribe, or otherwise stop paying for your services. For example, let’s say you start the year with 1,000 paying customers, but at the end of the first quarter, you lose 100 of them, going down to 900. This represents a churn rate of 10 percent; in other words, you’ve lost 10 percent of your customers.

For businesses that rely on ongoing subscriptions and continuously paying customers, customer churn is devastating; each customer you lose is a loss of not only immediate revenue, but possibly an entire lifetime of value. On top of that, high customer churn rates are a sign you’re doing something wrong; whatever convinced them to leave could be a cause of concern even for your existing customers.

As you might imagine, your goal should be to reduce your customer churn rate as much as possible. It’s almost impossible to get that churn rate to zero, since some customers will leave your platform for reasons beyond your control, but you should be able to dramatically reduce this rate.

How to Reduce Customer Churn

These are some of the best strategies for reducing customer churn:

  • Provide the best possible service. This should go without saying, but attempt to provide your customers with the best possible service, and be as attentive as possible. When a customer reaches out to you with a question or concern, address it right away—and as completely as possible. Surprise your customers by going above and beyond the call of duty.
  • Better educate and train your customers. You can also reduce customer churn by better educating and training your customers. When onboarding new customers, make sure they fully understand everything your product can do—or all the services you offer. Host regular webinars and events to better acquaint your customers with these features.
  • Engage with your customers regularly. Keep your brand top-of-mind and keep your customers engaged by reaching out to them on a regular basis. Write new content frequently, and keep customers up-to-date with emails and updates on social media. It’s also helpful to touch base with your customers one-on-one at least occasionally.
  • Prove your value. Your app or product may be valuable to use, but can you objectively prove it to your customers? Occasionally go out of your way to demonstrate how and why your brand is valuable to your customers. Are they saving time? Are they saving money? Send them a reminder so they don’t forget.
  • Prioritize your most valuable customers. Customer churn is bad no matter what, but it’s even worse when you’re losing your most valuable paying customers. Shift your strategy to invest even more time and effort into the customers who are paying you the most—and the ones who are most likely to be loyal. Feel free to make extra concessions or provide extra benefits to keep them around.
  • Offer incentives to stay. Make it more attractive for your current customers to stick around. Offer discounts, bonuses, or freebies if they reach certain milestones in their subscription, or provide longer-term contracts that keep customers for a longer period of time.
  • Collect customer feedback. One of the most valuable strategies is to spend time regularly collecting customer feedback—and making actionable changes based on that feedback. When a customer files a complaint, try to understand what their main issue is. When a customer leaves, ask them what you could have done better. When a customer seems loyal and happy, ask them what keeps them around. Use these data (and any suggestions you receive) to power the changes you make to your products and services.

The Importance of Measurement and Analysis

No matter which strategies you use to reduce customer churn, it’s vital that you use the right tools to measure and analyze your customer churn rate. You should know your historical customer churn rates at every time interval, and you should have a clear, objective indication of how your current efforts are affecting your churn rate. Otherwise, you’ll never know for sure whether your churn reduction strategies are working.

You may have to try many different churn reduction strategies before you discover the perfect combination of approaches. Keep an open mind, and be willing to make changes on the fly as you learn more about your customers.

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