Customer churn refers to customers who stop doing business with your company. To determine your company’s rate of churn, divide the number of customers lost during a period by the number you started with. If your customer churn is high, your marketing strategy is not striking a chord with customers.
Why does customer churn happen?
Customer churn often indicates that brand loyalty is weak and customer engagement is poor. Two factors that lead to this are:
- Price – A common reason customers bail is because they found the same or similar service or product elsewhere at a lower price. That doesn’t necessarily mean you should cut your price. What you should do is offer more value. Customers are often willing to pay a higher price if a service or product offers more value over another brand.
- Bad Customer Service – Poor customer service leads to frustrated customers. It extends beyond the customer’s initial experience when purchasing goods to after-sales support. Is it easy for customers to contact you when they have a problem or need information? How do you handle a complaint? Good customer service is an essential ingredient to happy customers. Happy customers will want to continue doing business with you; frustrated customers won’t.
What can you do to prevent customer churn?
Customer churn can threaten the survival of your small business. Losing just 5% of customers can drastically reduce turnover. So how can you prevent loss of customers?
1. Create a seamless customer experience – Customers want a seamless experience from start to finish. This includes a quick onboarding process, user-friendly website or e-commerce store, and easy ways to communicate with you. Battling with a glitchy e-commerce site or having to jump through hoops to have a problem solved can scare customers away.
2. Be proactive with communication – Regular communication with existing customers increases customer retention. After a sale, follow up to find out if they are satisfied with the service they received. Implement email marketing campaigns that inform customers of promotions or offer discounts. Be proactive on social media and responsive when people engage with your brand.
Good communication can help you connect to and retain customers. That’s where we can help. We can write great copy for your email marketing campaigns or social media posts. To get started, email us at [email protected].