You keep losing customers only when you stop caring. Not when you have made up your mind to look at some of the powerful strategies to stop customer churn.
Just about when we start to aim at the best practices to understand and stop customer churn, here’s explained in simple terms the meaning of customer churn.
Simply put, customer churn is the percentage of customers that stop using a product or service over a period of time. Plain mathematics can tell you the churn rate. Here’s the formula,
When a customer discontinues your service or fails to renew your subscription, they are called the ‘churn’ for the period. For a company dealing with high customer churn, it is very important to understand why churn matters and how it impacts business.
Why does Customer churn matter?
As per reports(Source: Deloitte),
- Acquiring a new customer costs 5 times more than retaining an existing customer.
- Increasing customer retention by 5% increases profits to the scale of 25-95%
- The success rate of selling to an existing customer is 60-70%, while the success rate of selling to a new customer is 5-20%.
The reports indicate that we lose revenue with churned customers whereas existing customers add to the Lifetime value. Therefore, customer churn if not reduced can jeopardize your business.
Read about the proven churn reduction techniques to stop excessive customer churn in SaaS
1. Understand the changed scenario
In the new world of subscription business models, customers can switch services with a click. This means that it is very important to have well-placed strategies to keep customer churn under check. It is advised that SaaS companies focus on customer retention rather than customer acquisition by adopting ways to reduce churn.
2. Update customers regularly
- Send updates frequently so that the customers are aware of your product’s new features, offers, discounts, and expansion plans.
- Carry out email marketing campaigns to keep them abreast of the latest information about your products.
The objective is to make customers feel involved with your business so that they are unlikely to switch over to another product.
CRM (Customer Relationship Management) tools can aid in sending updates or personalized follow-up emails to customers in bulk. Configurable email templates can simplify the process further.
3. Get in touch with high-risk customers
It is practicable to stop a lot of the churns by reaching out to those customers who are on the verge of churn.
As a proactive measure, the CRM tool makes it a reality to place the fastest calls. Your service representative can make calls in no time from a unified ticket dashboard. Thanks to CRM integrated with cloud telephony.
4. Resolve complaints at the earliest
Customers post complaints, reviews, angry comments, and even ask basic questions on product usage on your social media page. Resolve the complaints in the shortest time possible.
CRMs that support omnichannel integration with multiple social media platforms facilitate seamless conversation across several channels.
5. Never compromise on service
Customers churn for numerous reasons but the bulk of the reason is apparently poor customer service. Likewise, superior customer service also spurs loyalty.
- Identify the high-risk customers by checking ticket history. Viewing the complete service ticket history of a customer is feasible in a CRM ticket dashboard.
- Frequent tickets related to service issues may indicate that they are having a tough time using your service. Your service representative can prioritize, manage and resolve the tickets from a centralized platform.
6. Do your homework so as to keep churn under control
- Provide training to your staff, on soft skills, technology, or in any area that’s relevant to your business to help them deliver the best service possible.
- Never let rude staff behavior or slow service crop up as a reason for customer churn.
- Update your self-serve portals and KMS frequently so that your customers can seek perfect information.
7. Stay competitive
Do not be left behind in the competitor study. Comparative market analysis on competitors gives you insights on the
- things they do right
- what attracts your customers to them
- where competitors are falling short.
This helps you to outperform your competitors and importantly, lets you discover opportunities to win your customers.
8. Offer incentives
- Pamper the high-risk customers by offering them incentives. Customers love incentives such as discounts, free coupons, or reward points.
- But spend your incentive budget wisely so as to balance it out with the profit you make by the retention of high-risk customers.
9. Collect feedback from your customers
- The feedback collected through popular surveys like NPS, CSAT, or KPI is pivotal to understanding customer churns.
- The detractors in the NPS survey can most likely churn. They are identified as high-risk customers. Reach out to them and offer the best solutions to their problems to stop them from canceling your service.
- Also, work on the passive customers in NPS surveys to turn them into promoters.
Send out automated survey forms with CRM and choose from its numerous customizable reporting formats to view data in any form you understand.
10. Conduct exit surveys for churned customers
Collect feedback from the customers who churned. Do not close the door on them as soon as they leave. They are still a valuable source of data.
Pose them with questions that answer the reason for leaving and who they are currently doing business with.
With this data, you can make improvements on the pain areas in business and also understand trends among churned customers, if any. This guides you to stop customer churn for identical reasons in the future.
11. Plan for a perfect Onboarding Mechanism
Now that you have successfully onboarded your customer, go that extra mile to ensure that it was well planned without any pitfalls. This is because a large number of customers leave at the start of the journey just because they are ignorant of product usage.
Kapture Knowledge portal
CRMs with Knowledge Management Systems or KMS is a priceless knowledge repository that ensures that none of your customers churn due to product usage ignorance. Use KMS to share
- product tutorials
- installation guides
- basic troubleshooting manuals
Let them know that the self-serve features or KMS are within their reach. Also, offer dedicated account managers and round-the-clock support to resolve their queries.
12. Keep Customer Success team as frontline
The sole purpose of this team is to build customer relationships and ensure customer satisfaction through one-on-one conversations.
Hence, upgrade your customer success team’s problem-solving, analytical, and communication skills to deliver exceptional customer service. Doing so can go a long way in fighting excessive churn in the SaaS business.
13. Value your valuable customers
Loyal customers are most likely to recommend your brand to others, in the course of which they possibly stop a lot of customers from churning.
In addition, loyal customers are bankable as they bring revenue through referrals.
The stat given below shows the actions the customers likely performed after receiving a reward.
Image source: Amazon AWS
Therefore, boost up your existing loyalty programs to engage loyal customers to the fullest as loyal customers have the ability to control the churn rate.
Deeply satisfied customers = Lifelong Profit.
Jim Heskett, Professor Emeritus, Harvard Business School, put together the crux of business in a simple yet- to-the-point equation in his book, The Service Profit Chain. So,
Satisfy your customers. Win them back. Stop excessive churn with Kapture
Powerful CRMs with AI (Artificial Intelligence) capabilities can help
- Carry out customer churn analysis with the help of segmented customer data.
- Follow customers diligently at each juncture of the customer journey to stop churn.
- Provide the visibility you need to cut down excessive churn.
Thus, become customer keepers from customer losers. Opt for Kapture’s free trial now.
About the Author
|Seema C Mohan
|Seema C Mohan is a content writer at Kapture. She is passionate about all things XaaS and loves to write value-added content. She has been in Business Process Management in the past and has experience in streamlining processes for Enterprise Mapping Projects. She has published technology articles in National and International journals. Her job at Kapture helps her gain more insight into the SaaS industry and emerging technologies.