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What is Customer Churn? Why do we need to measure the churn rate? Why focus on customer churn and not growth? How does one reduce the churn rate?<\/em><\/p>\n <\/p>\n <\/p>\n If you\u2019ve been trying to find the answers to these questions, we\u2019ll try and do that by the end of this blog! <\/p>\n <\/p>\n <\/p>\n Customer churn is an important metric. Although technically it shows \u2018loss\u2019, it is a measure that can help you gain more. Simply put, customer churn is the number of customers your business loses over a certain period \u2014 monthly, quarterly, annually, or however, you want to measure it. <\/p>\n <\/p>\n <\/p>\n Losing customers along the way is inevitable. However, knowing how many customers you lose, at what point this happens, and ultimately strategizing to reduce your churn rate is what truly leads to success. <\/p>\n <\/p>\n <\/p>\n Let\u2019s break customer churn into smaller pieces, and get a better understanding of what it is, how do you measure it, why you need to measure it and most importantly how to reduce it. <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n Customer churn is the percentage of customers you lost during a certain period. Say, for example, you start Quarter 1 with 400 customers and at the end of the quarter, you have 380 customers. Your customer churn rate is 5%. You lost 20, i.e, 5% of your customers in the quarter. <\/p>\n <\/p>\n <\/p>\n Dividing the number of customers you lose during the stipulated period by the total number of customers at the start of the period is what gives you your customer churn rate. It is a critical metric that growing businesses must evaluate to know more about your customer retention and better understand how you can bump up customer retention<\/a>. <\/p>\n <\/p>\n <\/p>\n As mentioned earlier, it is normal for any business to lose some customers along the way. And while it\u2019s important to focus on acquiring new customers, it\u2019s equally important to retain the existing ones. While the percentage of lost customers over a specific period is the most common way to calculate churn rate, you could also just calculate the number of customers lost or even the value of revenue loss. <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n If losing some customers is so normal, why do we need to measure the churn rate? It may seem like a 3-5% churn rate is not so bad after all, but in the long run, you will be losing a lot more than just customers. Acquiring new customers is much more expensive than retaining the ones you already have. Additionally, existing customers already have a relationship with your business so they are more likely to spend more than new customers who are still building a relationship with your products and services. <\/p>\n <\/p>\n <\/p>\n Think of all the things you invest in when trying to acquire new customers \u2014 marketing, acquisition, promotions, advertisements and proving yourself to be better than your competitors. You don\u2019t have to do all that with existing customers! All you need to do is offer great customer service and quality products and services and they will keep coming back for more!<\/p>\n <\/p>\n <\/p>\n Not just business and revenue, existing customers also contribute to your brand\u2019s reputation as they are more likely to recommend you to others, engage with you on social platforms, help maximise reach and get more visibility. <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n Whether you\u2019re a small business, a medium one or a large one \u2014 winning a new customer is always exciting, and losing one is always disappointing. <\/p>\n <\/p>\n <\/p>\n No matter what your products and services are, some customers will move on to another brand, or maybe just stop using what you offer. However, the right customer retention strategy and a focus on customer retention at every step can help you keep your customers and continue doing business with them. <\/p>\n <\/p>\n <\/p>\n Here\u2019s a list of things that can help you reduce customer churn and prevent losing your customers:<\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n Exceptional customer service and support go a long way in retaining customers. Statistics show that 89% of customers switch to doing business with a competitor because of lack of, or poor, customer service<\/a>. Customer support extends beyond helping them during the buying journey. You need to be proactive and offer support from time to time to let the customer know you care. For example, if there\u2019s a better\/higher version of the product\/service they have bought from you, suggest it to them. Whether it\u2019s on a social platform, or through emails, communicate with your customers and show them you\u2019re there to help them every step of the way and beyond. <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n Think of all and different ways you can communicate and engage with your customers<\/a> to stay top of mind! Newsletters, promotional emails, recommendations, feedback, surveys are all different ways you can regularly initiate conversations with your customers. This not just helps them know about all the new products and services you have, but also makes them regularly think of your brand, and thus come back for more. <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n Everyone likes to feel special! Personalized messaging, via emails or other communication channels, makes your customers feel like they\u2019re special. Using first names, remembering birthdays or anniversaries, sending season\u2019s greetings or remembering their favourites are all a way to make them feel like you care about them. This also helps build brand loyalty <\/a>and builds a strong brand recall. <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n A lot of times we get so busy trying to bring in and charm new customers, we tend to forget about those who\u2019ve been around \u2014 our valued existing customers. It\u2019ll be a bigger loss to your business when your valued long-term customers move to a competitor. Make sure you reach out to them from time to time to let them know how much you value them. You could offer a loyalty program, exclusive promotions or discounts, or just a simple \u2018Thank You\u2019 email to let them know you\u2019re willing to go the extra mile to keep them happy and satisfied. <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n While churn may be inevitable, analyse the possible reasons for it. At what step of the customer journey are you losing them? What could be the \u2018trigger\u2019 for a customer to leave your brand? Possible reasons could be lack of product\/service quality, bad customer support, not enough communication, or any other possible reason. Knowing the possible reasons can help you better your products, services, support, or communication to make sure customers stay on. <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n Breakups are hard. <\/p>\n <\/p>\n <\/p>\n When a customer breaks up with your business you might be disappointed but the good news is that you can prevent it. Customer churn rate is a valuable metric that not only helps you keep your customers but also helps you strengthen your way of doing business to reduce churn. Analyze churn rate from time to time to know what you\u2019re doing right, and what more you could do to convert existing customers into loyal and repeat customers. <\/p>\n <\/p>\n <\/p>\n Don\u2019t stop reaching out and trying to acquire new customers, but don\u2019t ignore the existing ones in the process. <\/p>\n <\/p>\n <\/p>\n If you have any questions, please feel free to leave a comment below. For more tips and help to build successful businesses head to our Marketing Blog<\/a> category. <\/p>\n <\/p>\nWhat is Customer Churn? <\/h4>\n
Why is it important to measure customer churn? <\/strong><\/h4>\n
How to reduce customer churn?<\/h2>\n
Customer Service and Support<\/h3>\n
Communicate and Engage <\/h3>\n
Personalization <\/h3>\n
Value Loyalty<\/h3>\n
Analyze The Churn<\/h3>\n
Don\u2019t Lose Your Most Valued Asset \u2014 Your Customers! <\/h2>\n