Are You Monitoring Your Churn Rate?
Nobody likes to see their clients leave them. Especially if there is something that can be done to stop them from leaving us! In the race to sign up as many new customers as possible, we can sometimes neglect to monitor the number of customers discontinuing their relationship with us. Whether they found a more affordable service or whether they were dissatisfied with our service, customers leave to find someone else to cater to their needs.
This number of subscribers who cancel their subscriptions in a given time period, expressed as a percentage of all customers, is known as the Churn Rate and it is one of the most important metrics that businesses, especially SaaS and Freemium businesses, have to keep an eye on. While the number of customers joining in a given period shows the success rate of marketing efforts of the company, the number of customers leaving shows the failure rate of either their operational or customer relationship management efforts.
Organizations have to keep their churn rate as low as possible, and here are several tips on how to do so:
Are you engaging them? Very often, customer relationship ends at sending a welcome mail to the customer on sign up and moving on to the next one. The only contact with customers would be when they have an issue which needs support or when you want to talk to them about their account/payment, etc… Customers do not appreciate being left out and it is your responsibility to constantly engage them and make them feel that they are not forgotten.
Simply send them a how-to mail, remind them of an upgrade, or send a birthday card! Just make sure you are engaging them in some meaningful way.
Seek continuous feedback and provide continuous value addition. Do not wait for your customers to tell you what they want. Seek feedback actively and use it to preempt your customers’ wishes the next time. Always seek to add value with every upgrade, whether or not the customer knows about the need right away.
Say you are my accounting software service provider and say you realize that due a change in the law, I now have one more regulation to comply with; ensure that you provide for that need, not only will I be grateful but I’ll also have no reason to switch to another provider either!
What’s the competition doing? One of the reasons why your customers consider leaving you is because they are getting it better somewhere else. Always keep monitoring competition and regularly benchmark your offering against their’s. Come up with competitive advantages and leverage them to retain your existing customers. If you can’t match up in terms of the scope of the offering, then make sure you offer better support than your competitor and make sure that the customer knows this.
Educate your customer. Generally, first-time visitors to your website will not have a complete understanding of your products/services. Ensure that you have listed enough material, be they white papers, case studies, info-graphics, or blogs, through which customers can educate themselves and understand the scope of the product and the benefits of using it. I’ll take an informed customer over an uninformed one any day!
Sounds like too much work? Get an online CRM solution that automates parts of this process and helps you retain your customers and reduce churn rate!