How to reduce customer churn?

If you don't hear from your customers you might be fooled into thinking they're happy and nothing needs to be done. Don't be lulled into a false sense of security! Actively monitor customer opinions about your product through review websites such as Capterra or GetApp. Not only is this a great way to gauge how your product is doing, but it also helps build “social-proof”, an essential component for any healthy marketing strategy. No reviews? No worries! Create a campaign around eliciting reviews from your customers, perhaps offer them a voucher for their time.

Aside from reviews, you should be proactively asking your customers how they are doing. For high-net customers, personalized follow-ups are really a big must. But don't forget all the other customers! For these clients, Net Promoter Scores (NPS) are the way to go and can produce great results in reducing churn rate.

“Recently we've started using NPS to lower our churn, and the results have been great - we've reduced it by 20-30% by doing so,” said Christian Sculthorp, Marketing Director at AgencyAnalitics. “We used AskNice.ly to collect NPS scores after using our product for 3 months and it then adds the score to the user in our CRM.”

The key to this is following up on customers who give you a low score. Research shows that customers who have had a problem successfully resolved turn into more loyal customers than customers who have never had a problem in the first place.

A relatively new strategy is the customer exit survey. OK, so a customer churns, they might drop you a line and tell you why, or perhaps there was a long track record of unmet expectations that you can follow to make sense of why that particular customer left. But often, customers leave and there's no trace of why they left. Some businesses use the customer exit survey. We send out a simple feedback survey when a customer churns asking why. This results in invaluable insights into our customers.

Companies like Bidsketch conduct full-blown interviews called “Jobs to be done interviews” in an effort to understand how to prevent customer churn. These interviews don't just focus on the why, but on the entire customer journey.

“Instead of asking “why?” you simply focus on what they did — on their story. The focus is on the story of when they first started to struggle with the product, and all the way through to them logging in to cancel. By focusing on the actions, the “why” becomes pretty clear and you get much deeper insights into what's causing retention problems,” said Ruben Gamez, founder of Bidsketch.

Gamez delves into their “Jobs to be done” interview strategy in a blog post that you can find here.

If you're not partial to an exit survey, try running a report says Jeremy Marsan, business analyst at FitSmallBusiness:

Whether it's a friendly email, an automated survey, or a report, any information your churned customers can provide is invaluable. It can also be an opportunity to win them back if the problem they had is negotiable, such as in the case of pricing.

I think we all know that customer service is paramount in minimizing customer churn. But did you know that the definition of bad customer service isn’t rude customer representatives? Sometimes you don’t even need a fancy customer churn formula to see where you went wrong. According to a recent survey, 42% of customers define bad customer service as having to tell the same problem over and over to multiple customer service agents. In fact “rude representatives” only got 13% of the vote!

This means your customers would rather talk to a rude customer service representative than talk to multiple friendly representatives, but have to repeat their story multiple times. (Don't try this out, just trust the survey).

So how can you avoid this scenario where customers are repeating themselves to a seemingly endless chain of friendly customer service representatives? By following the three step plan to zero repetition and reduce your customer churn rate:

• Sync your customer data across sales, marketing, and customer care teams. This means your customer care team will have a complete view of all of your customer's interactions with your business from the very first email right up until the last. Have transparent internal communication. This also means your customer care team will have access to the most up to date information when they need it. (PieSync can help you sync your data from Kommo to all the other apps you use in your business. Take a look at all the apps you can sync with Kommo)
• Make sure your team knows the 5 critical customer service skills.
• In case of customer service emergency, you should have a customer recovery plan ready to hand.

That's it! I hope these tips help your customer care team keep more customers in 2019. If you have other great ideas on how to beat churn feel free to drop me a line or leave a comment.

This post was originally published Feb 19, 2018, updated June 28 2019

✅Kommo is a pioneering Messenger Based Sales CRM software that helps businesses achieve more sales and create long-lasting relationships with their customers. It is a tool that enables companies to reach better results and increase their profits.