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How to Lower Your Churn Rate - Simple Tips and Tricks
Think customer churn isn’t a problem? You might want to think again. Your churn rate could be dramatically slowing your growth and profitability. Consider these sobering statistics.
- Every year U.S. companies lose $136.8 billion to avoidable customer churn.
- One in three consumers says they would be willing to switch to a competitor after just one instance of poor service.
- These aren’t idle threats. Nearly half of all consumers have left one company for another due solely to a bad experience.
This is bad news because it costs considerably more to acquire new customers than to hold onto those you already have. Of course, some amount of churn is unavoidable. Some percentage of customers naturally bounce around between competitors. You simply can’t expect to please every customer every single time. However, losing too many customers can be very costly. For each one that falls away, it costs five times as much to replace them.
But this last figure promises a plus side. Making even modest retention gains can have an outsized effect on your bottom line. According to a research study conducted by Bain and Co., achieving just a 5% retention increase can boost profits between 25% and 95%!
If you’re suffering a high churn rate, there are steps you can take to dig yourself out of the hole. We’ll discuss a few simple tips and tricks that can help you keep more of your customers and hold onto them longer.
DON’T JUST REACH OUT WHEN YOU’RE NEEDED
The old adage, “If it ain’t broke, don’t fix it” steers people wrong far more often than it helps. You certainly shouldn’t fix something that doesn’t need it, but that doesn’t mean you shouldn’t check in occasionally to ensure there aren’t problems brewing.
Proactive communication saves customers by dealing with issues before they irreparably damage the relationship. There’s a secondary benefit as well. Your customers will appreciate your commitment to their experience, and they’ll allow you a wider berth.
Keep the lines of communication open in both directions. Ensure your customers are aware of all the ways they can reach you, and then don’t wait to hear from them. Reach out whenever appropriate with helpful suggestions and useful information.
LEARN WHY CUSTOMERS ARE LEAVING
There’s a certain amount of inertia that customers have to overcome to switch companies. As long as it’s less demanding to stay where they are rather than move, your customers will stay put. As a result, when a customer does pull up roots, it’s almost certain they have a good reason. The trick to holding onto more customers is to learn what those reasons are.
Call up customers that left and ask them what happened. In most cases, people will be willing to talk to you if you’re earnest in your desire to improve. You may not win them back, but what you learn could well save a future customer.
Of course, you’ll only profit from your lessons if you take them to heart and improve your problems areas. Make a habit of staying in contact with current and past customers to keep your finger on how they’re feeling.
SHOW YOUR CUSTOMER THAT YOU CARE
When you poll customers about why they’ve left businesses, one reason stands shoulders above every other entry. The lion’s share of respondents say they switched away because they felt the company didn’t care about them.
This seems a simple lesson — be more caring. But the devil is in the details. There are dozens of reasons why a customer might not be feeling the love. They might have had a bad experience with a service rep, been put on hold for too long, or felt the company ignored their concerns. In truth, any time you neglect a customer responsibility, even slightly, you risk alienating them.
So raise all of your boats, working to improve every customer interaction across all of your communications channels. Since you can’t know where things might go wrong, you proactively work on all of them. The more effort you invest, the more obvious it will be that you do, in fact, care.
DO WHAT YOU DO WELL BETTER THAN EVERYONE ELSE
Do you know your competitive advantage? If you don’t, it’s worth putting in the time to discover it. Your competitive advantage is the thing or group of things that you can do that your competitors can’t — or at least not as well. In many cases, your advantage is the reason customers pick you.
For example, suppose your competitive advantage is that you can deliver the same quality as your competitors more affordably. In that case, you need to focus on delivering on that promise with each transaction. Because if you can’t, nothing is stopping your customers from looking elsewhere. However, if you provide successfully, most customers will happily keep taking advantage of your strengths.
GIVE YOUR CUSTOMERS THE HANDWRITTEN TREATMENT
Imagine two customers. One receives a formulaic thank you email from a company they do business with. The other gets a warm handwritten thank you card in the mail. The first feels cold and impersonal. The second seems like it was written specifically for the reader. Which customer do you think is more likely to feel appreciated? And as a result, which one is more likely to stay loyal?
Handwritten cards have an emotional potency that digital channels can’t match. They connect with the customer more deeply, both because of the sentiment and the extra time and effort it takes to prepare them. They say, “We appreciate you enough to send you some tangible and real.”
With Simply Noted, you can automate handwritten cards, delivering the benefits of handwritten mail without the time investment. Our handwriting robots use real ballpoint pens and can create cards in any volume. Our AI-powered smart fonts create a peerless handwriting experience that’s identical to the real thing.
Your customers will appreciate the extra effort, and they’ll reward you with their business. That’s, in fact, the real lesson here. If you put your customers first in everything you do, and we mean everything, you’ll be able to surmount almost any hurdle the world can throw at you.