Customer Churn refers to customers switching their preferred company based on certain products. By definition it is the percentage of customers that stopped using your company’s product or service during a certain time frame. Accordingly, its objective calculation is as follows: divide the number of customers lost during that time period by the number of customers you had at the beginning of that time period. As brutal as this number may be, it can prove to be extremely useful in calculating and improving business growth. This is because Customer churn evidently helps analyze the customer retention of the business.
How to Reduce Customer Churn?
In today’s times where markets are extremely competitive and the elasticity of most products is high, reducing customer churn to maintain sales can become very challenging. However, some helpful ways to reduce it can be:
Focusing Attention on Target Customers
The key factor in being able to retain customers is firstly to target the right audience. If you attract an audience that is essentially buying your product because of its low price etc., it is very likely that they switch based on the same reasons. However, if you find customers who buy into your company solely for the value and quality of the product that you are offering then they are much more likely to become long-term clients. Similarly, out of the audience that you attract, certain customers are plausibly more loyal and profitable. The growth of the business can therefore be maintained by focusing attention on these buyers more.
Ask For Customer Feedback
The direct cause of customer churn is unpleasant customer experience. Correspondingly, if customer experiences are analyzed to bring about improvements, customer churn will likely reduce. Through customer feedbacks that are insightful and critical, a business may considerably foster. This can be done through surveys, feedback forms, etc. More particularly, open ended questions in surveys that allow the client to freely discuss their personalized experience can give qualitative data. An average service that does not stand out in the market cannot prove useful in retention. Through specific feedback, your business can go above and beyond in providing the customers with the best service.
Engage with Customers to Build Community
Another useful technique can be increased engagement between the customer and the product. If buyers are interested in the particularities that the product has to offer, there is a very low chance that they deviate. One way to do this can be email marketing. Additionally, in the same sense, if a community within the customers is built, the customer churn will reduce. For example, online groups, and social media communities. These can firstly become a valuable and easily accessible source of information. Customers can ask product-related questions, share reviews, seek advice, and engage with like-minded individuals. This can create a sense of belonging that potentially improves customer loyalty.
