Customer churn is the percentage of customers that stop working with your company over a specified time period. Churn is calculated by dividing the number of customers lost, by the number you started with during a fixed timeframe, for example, last quarter.
While 0% churn rate is unrealistic, and occasionally losing a customer is a normal part of business, high customer churn is avoidable.
Here are five tips to keep churn rates low.
1. Provide Outstanding Customer Service and Support
Exceptional customer service is one of the best investments you can make for customer acquisition as well as retention. It makes customers feel good about doing business with you, whether they’re the new kid on the block or they’re returning for the 20th time.
2. Provide Value After the Sale
Your relationship begins with the sale; it grows by providing ongoing value. Stay in touch with weekly newsletters or emails, and keep customers up to date on upcoming programs, webinars, and discounts.
3. Identify Who Is at Risk
It’s in your best interest to know who is at risk of leaving – then you can reach out in time to make them stay. It’s not that hard to spot that at-risk customer: who haven’t you contacted, or heard from, in a while? Maybe a customer called you looking for something like a a quote or just more information, and you didn’t follow up. Also, analyzing the reasons for churn can help you predict if another customer, acting similarly, is more likely to leave.
4. Focus on Your Strongest Customer Relationships
Don’t ignore your best customers to salvage a new relationship. It’s better for a new customer to churn, then to lose a loyal, long term one. It can cost five times more to attract a new customer than it does to retain an existing one.
5. Recognize Your Top Customers
Some of your customers will offer more than others across the lifetime of your business relationship. Appreciate and recognize those customers to make sure they have a reason to keep coming back.
Churn rate is one metric to stay on top of as you grow. It’s natural to have some customer turn over as your business evolves. Keep your churn rate low by using these five best practices, and you’ll maximize customer retention.