Customer churn happens to the best of us, but it doesn't have to be an unavoidable part of business. In fact, there are tactics that top performing customer service teams have in place to ensure they keep their churn rates low.
Even businesses with the most outstanding customer service experience this problem. The crucial thing about churn is what you do with it. If you're just letting your customers go without so much as a "Hey, what happened?" you're missing a golden opportunity to learn more about your customers, your product and your business. These three tips show you how to reduce customer churn and get the most out of customers who do leave.
If you don't hear from your customers you might be fooled into thinking they're happy and nothing needs to be done. Don't be lulled into a false sense of security! Actively monitor customer opinions about your product through review websites such as Capterra or GetApp. Not only is this a great way to gauge how your product is doing, but it also helps build "social-proof", an essential component for any healthy marketing strategy. No reviews? No worries! Create a campaign around eliciting reviews from your customers, perhaps offer them a voucher for their time.
Aside from reviews, you should be proactively asking your customers how they are doing. For high-net customers, personalized follow-ups are really a big must. But don't forget all the other customers! For these clients, Net Promoter Scores (NPS) are the way to go and can produce great results in reducing churn rate.
"Recently we've started using NPS to lower our churn, and the results have been great - we've reduced it by 20-30% by doing so," said Christian Sculthorp, Marketing Director at AgencyAnalitics. "We used AskNice.ly to collect NPS scores after using our product for 3 months and it then adds the score to the user in our CRM."
amoCRM comes with a built-in NPS system, so tracking satisfaction is easy. Learn more
The key to this is following up on customers who give you a low score. Research shows that customers who have had a problem successfully resolved turn into more loyal customers than customers who have never had a problem in the first place.
A relatively new strategy is the customer exit survey. OK, so a customer churns, they might drop you a line and tell you why, or perhaps there was a long track record of unmet expectations that you can follow to make sense of why that particular customer left. But often, customers leave and there's no trace of why they left. Some businesses use the customer exit survey. We send out a simple survey when a customer churns asking why. This results in invaluable insights into our customers.
Companies like Bidsketch conduct full-blown interviews called "Jobs to be done interviews" in an effort to understand how to prevent customer churn. These interviews don't just focus on the why, but on the entire customer journey.
"Instead of asking "why?" you simply focus on what they did — on their story. The focus is on the story of when they first started to struggle with the product, and all the way through to them logging in to cancel. By focusing on the actions, the "why" becomes pretty clear and you get much deeper insights into what's causing retention problems," said Ruben Gamez, founder of Bidsketch.
Gamez delves into their "Jobs to be done" interview strategy in a blog post that you can find here.
If you're not partial to an exit survey, try running a report says Jeremy Marsan, business analyst at FitSmallBusiness:
"The beauty of using a CRM is that it can provide answers as to why customers are leaving your business. Whether you notice a sudden uptick in customer churn, or simply want to investigate why it happens, the customer data you save in your CRM holds the answers."
Create a report of your customers who have recently churned, then compare this information against the "average" customer. Do they have a different age bracket? Are they in a particular geographic location? "From this, you can begin to deduce what's causing the drop-off: Perhaps budget is playing a role, or there's a newer competitor poaching them," says Marsan.
Whether it's a friendly email, an automated survey, or a report, any information your churned customers can provide is invaluable. It can also be an opportunity to win them back if the problem they had is negotiable, such as in the case of pricing.
I think we all know that customer service is paramount in minimizing customer churn. But did you know that the definition of bad customer service isn’t rude customer representatives? Sometimes you don’t even need a fancy customer churn formula to see where you went wrong. According to a recent survey, 42% of customers define bad customer service as having to tell the same problem over and over to multiple customer service agents. In fact "rude representatives" only got 13% of the vote!
This means your customers would rather talk to a rude customer service representative than talk to multiple friendly representatives, but have to repeat their story multiple times. (Don't try this out, just trust the survey).
So how can you avoid this scenario where customers are repeating themselves to a seemingly endless chain of friendly customer service representatives? By following the three step plan to zero repetition and reduce your customer churn rate:
That's it! I hope these tips help your customer care team keep more customers in 2019. If you have other great ideas on how to beat churn feel free to drop me a line or leave a comment.
This post was originally published Feb 19, 2018, updated June 28 2019