TL;DR
- Start with a solid understanding of churn management and its importance in maintaining a healthy customer base.
- Identify the root causes of customer churn through detailed churn analysis and take corrective actions.
- Make customer engagement a priority to mitigate subscription churn, using surveys and direct communication to understand their needs.
- Keep customers in the loop about your products, ensuring they recognize the value and utility of what they're paying for.
- Incorporate value-added services, additional features, and premium support access to enhance customer satisfaction and loyalty.
- Encourage longer commitments through long-term contracts and adapt your pricing strategy to meet customer preferences.
- Ensure your customer service is top-notch, making every customer feel valued and heard to prevent them from leaving.
- Adopt a proactive approach to educating customers about product updates and new features to ensure continuous engagement and satisfaction.
- Survey customers poised for cancellation to identify improvement areas and draft suitable solutions.
- Leverage Togai's software for real-time churn tracking and customized pricing, aiming for higher customer retention rates.
“Every company’s greatest assets are its customers because, without customers, there is no company.” Michael Boeuf
In the world of business, where customer attrition is inevitable, what would we do without the safety net called churn management? What is churn management, and how can you wield it to reduce churn? This is the core topic of our blog. Let’s get to the details.
Understanding the In & Out of Customer Churn & Churn Management
Customers are the backbone, lifeline, and core objective of every business on the planet. Acquiring new customers, maintaining the existing ones, and preventing customer churn requires a certain finesse and knack.
What is Customer Churn?
The term “customer churn” refers to the number of customers who leave your company, services, or products for another one within a given timeframe. Rather than expressing it in numbers, customer churn is indicated in monthly or annual percentage terms using the following formula:
Customer Churn =
Number of churned customers within a specific period
_______________________________________
Total number of customers at the beginning of the same period
Using this formula, you can calculate the number of churned customers. However, to get to the root of the problem, you should investigate why this issue happens.
Common Reasons for Customer Churn
Customer churn is an inevitable evil in the world of business. While a small percentage is forgivable, a high churn rate is an alarm bell because it can shake the very foundation of your business. Besides, your knack for customer retention is critical to the wheel that drives your business.
Hence, the primary step to controlling customer churn is identifying the root causes. Some of the common ones are:
- Lack of a smooth customer onboarding process.
- Misrepresentation of product sales.
- Difficulties with product purchase and adoption.
- Lack of consistent product quality.
- Lack of adequate awareness in using advanced product features.
- Lack of proper customer support.
- Company restructuring processes.
- Changes in customer business model.
- Issues with renewal process.
- Attrition of key stakeholders from the company
Understanding these issues is vital in churn management because it helps you address them and take corrective action before you lose more customers.
Customer churn also indicates your inability to entice them about your product or service. Remember that customer acquisition costs more than product promotion. If you successfully retain customers, your average customer lifetime value (CTV) will increase. This will boost profitability and lead to sustainable business growth.
As we proceed with our blog, we shall explore effective strategies to refine your churn management.
Also Read: Revenue Churn: What Is It and How Is It Calculated?
9 Strategies to Prevent Customer Churn & Improve Retention
Strategy 1: Conduct churn analysis to identify the reasons.
Want to retain your customers? It is crucial to investigate the reasons behind why a once-loyal customer has discontinued their patronage. Understanding the root cause of their departure is key to effective churn management. You can develop a more comprehensive strategy for dealing with customer churn by delving deeper into the issue.
Strategy 2: Reach out to your customers.
Demonstrate your customer care by reaching out to them before they do. This is how you weld your relationship marketing skills. You can also:
- Incorporate your offerings in their daily workflow.
- Demonstrate the daily value of using your products.
- Conduct surveys to understand the customer pulse
- Ask them about features they want in your product.
- Ask them about the challenges they face while with your offerings.
This dedicated engagement will effectively mitigate customer churn even before it happens.
Strategy 3: Keep your customers well-informed.
Keeping your customers in the dark about your products and expecting them to remain with you is unfair. Many businesses overlook the need to educate their customers about the product, its features, quality, and value.
Adopting a different onboarding approach creates a sense of urgent value and attachment to the product. Offer discounts and attractive promo offers to customers who are about to churn.
You can also bolster your efforts by offering:
- Value-added services
- Additional features
- Premium support access
Togai’s onboarding, for example, is simple but super effective. To ensure that new users are not only introduced to the product's features but also understand how to leverage these features for their success, Togai offers:
- Comprehensive training
- Engaging webinars
- Intuitive video tutorials
- Interactive product demos.
Although these offerings may only marginally increase your operating costs, they can result in a significant increase in brand loyalty, as well as reduced churn.
Strategy 4: Entice your customers with long-term contracts.
Give your customers a proper reason to stay- like long-term contracts instead of monthly plans. Why? Long-term contracts give them enough time to use the product and understand its benefits firsthand. Once they cross this threshold, they are likely to remain committed in the long run.
Strategy 5: Collect timely feedback.
Whether it is good or bad news, gather as much feedback as you can. It demonstrates your effort to communicate with your customer base, which is something that customers value. These feedbacks expose the pulse of your customer sentiment.
You need to regularly monitor customer sentiment. However, polling existing customers is insufficient. Rather, survey customers who are poised for cancellation to know the reasons behind their decision. Identify areas for improvement and draft the right solutions.
You can also track the lead churn indicators on the list we have mentioned above.
Strategy 6: Be consistently communicative.
It is crucial to promptly respond to the feedback provided by customers who actively use your product and suggest new features. If such customers do not receive timely responses, they might feel ignored or unheard. Considering that these customers are already engaged with your product, it is important to ensure that their feedback is submitted to your product teams for future enhancements. Maintain continuous communication, respond promptly to their issues, and show genuine interest for their feedback. A little effort goes a long way.
Strategy 7: Adopt a flexible pricing strategy.
Your product pricing is a major aspect that defines your success or failure. Here’s where Togai plays a major role. As a leading pricing implementation platform, Togai allows you to experiment various pricing structures and adopt the one that best suits your business. Moreover, with Togai, it is possible to adopt a new pricing strategy in less than an hour. Flexible pricing is what every customer wants. Give it to them, and they will remain loyal forever.
Strategy 8: Deliver the best customer service.
Nothing works better than excellent customer service for customer retention.
Your customer service representative should have the authority to resolve issues and answer questions for the customer. You can also implement efforts such as:
- Upgrading customers from original purchases.
- Convince new customers to buy comprehensive packages as opposed to what they have planned.
- Upsell and cross-sell the service value.
In short, the more you make your customers feel special, the less likely they will leave your company.
Strategy 9: Fortify your customer loyalty.
Are you making your customers feel appreciated? Have you built a community built around your products and services? Start building on these factors to solidify your customer loyalty towards your brand, service, product, and company.
Reinforce Churn Management With Togai
“ Finders Keepers Losers Weepers.”
As colloquial as that sounds, it is true with customer churn and churn management. You cannot afford to lose a customer. Hence, it only makes sense to put in every effort to retain them. Which means you need to give them ample reasons to stay with you.
Togai is one of the best Usage-based Metering and Billing Software designed with real-time analytics to track churn and address it right away. Togai is also customizable for any use case, allowing your customers to receive bespoke pricing. Our platform also aids your customer retention with its user-friendly UI.
Seeing is believing! Schedule a demo with the Togai team to witness first-hand what our platform can do for your customer retention strategies.
