6 Ways to Reduce Churn in Your Online Business


Churn. The big bad wolf that every business is afraid of. Sometimes referred to as customer turnover, it’s often found in companies that offer subscription services, however it is far from being exclusive just to them.
Churn is when a customer starts using a business’s product or service, and for one reason or another, stops completely and switches their loyalty to another company.
Think of customers who churn as “the ones that got away”. At one point, this person was YOUR customer, and a happy one at that. Then due to a variety of different reasons, they decided to stop supporting your company. One of the main ways people determine churn is by calculating a churn rate. However, without getting into the nitty gritty details of calculations, in this blog we’ll be breaking down why churn happens, and six ways you can start reducing churn to prevent it from hurting your business.
Go Above and Beyond With Your Customer Service
One of the best things you can do to set yourself apart from the competition is have better customer service. Not only will having great customer service make your customers feel special, but bad customer service will drive them away. In fact, 35% of customers report to stop doing business altogether with a company after only one negative customer service experience.
If your business has the resources for it, you should definitely be considering hiring a dedicated customer success manager. This person works with your customers throughout their journey by giving them the right tools for support.
A successful manager:

  • Identifies customers with potential to defect.
  • Nurtures client relationships to make them stay.
  • Builds long term trust with your customers so they don’t leave if they do have one bad experience.
  • Also remember to remind your customers how much value you provide to them, whether that be with saving money, product quality, etc. Customers often forget this unless it is made explicitly clear. You can do this by giving them the facts. Collect metrics and data that speaks to the value you provide them and then present them with that data.
    Listen to Your Customers
    Analyzing your weak points is very important. The only way you can do that is by listening to the feedback you’re getting. You may think you know your business better than anybody, but there’s always one person who knows more… Your customer.
    Listen carefully to what they’re saying to you, not only in person but on social media and through Google reviews and other review platforms. If they say your product is too expensive, maybe it is. Check how much your competitors are charging and make sure you’re being reasonable. If they say they have trouble contacting you, they have no reason to lie. Work towards improving your contact availability. You get the idea, their feedback is very important.
    If you’re not getting the feedback you think you need, go and get it yourself. You can do this by sending customers exit surveys, calling them and asking questions, or even sending them an email. If you want feedback from your customers in real-time then you can implement apps, live-chat and chatbots on your site.

    Once You Get the Customer’s Attention, Keep It
    You know how they say to never let go of something great? Well, your customers ARE great. Once you get them you need to hold on for dear life.
    A great way to do this is by giving them something they can’t possibly ignore. If you detect that a customer may be on their way out for good, give them something free. This can be something like an add-on to a purchase or a free trial for one of your other services. Social media can also be a great tool in connecting with your audience and maintaining their attention.
    Frustration is one of the main reasons that customers lose attention or loyalty. You need to be proactive in your approach to make sure customers never get frustrated with your business or site interface. You can proactively message them with a chatbot on your website if you detect they are having trouble moving forward with their purchase.

    Onboarding is Everything
    After getting an initial customer, there is a risk of them leaving because they don’t understand the value you will increasingly add to their lives. A way to mitigate this risk is by improving your onboarding process and communicating things as clearly as possible to your customers across each stage of the sales funnel. This will undoubtedly reduce churn.
    A good metric to look at for onboarding is the 90-day clock. Analysis across several industries found that the average mobile retention rate after 90 days was only 20%. In other words, most people are losing 80% of their customers after only three months of having them to begin with.
    Having your customers create an account and provide their contact information helps with onboarding. If you are not already doing this, make sure you are collecting this information from your customers. That way you’ll be able to contact them to make sure they stick around once their onboarding experience is complete.
    Step Outside the Box of Your Business
    Think beyond your business. Think about your industry as a whole. Try to become a thought leader in your industry by writing and posting blogs to help out business owners and customers. We can tell you how much this works from experience.
    This also helps you build a community. People see communities as a place where they belong, and they are keen on leaving ones they love. So if you can turn your business into a community, you should see your churn rates come way down. The best way to do this is to create a public space for you and your customers to discuss freely. This can be a board on your website, or you can do it on a social media site that your customers already use (like a facebook group).
    Loyalty Programs and Exclusive Rewards
    Do you love free stuff? We love free stuff. Actually, we’re pretty sure everyone loves free stuff. So… GIVE your customers free stuff!!! Loyalty programs and exclusive rewards are a great way to show your customers you care about them.
    When customers receive gifts from your company for being loyal it reinforces their loyalty and keeps them around longer. This doesn’t even have to cost you much money. It can be as simple as a small gift card or discount on their next purchase.
    You can also gamify your rewards program to keep your customers more engaged. If you check out the Starbucks reward app, it is a great example of how to do this effectively.
    In conclusion, churn can be a business killer. Any experienced business owner knows how important it is to reduce churn. If you follow these six tips you’ll be sure to see positive results in your business. Also, if you do see customers leave, don’t let it get you down.Use it to motivate you to make your business better. Churn is natural and it’s impossible to fully eradicate it.
    As always, feel free to reach out and stay tuned for our next blog on how to improve your online business.

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    Author: Travis Esquivel

    Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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