Customer churn has become a costly mistake for most businesses. That’s why customer retention is so important. Even a 5% improvement can increase your profits by 25%. But it depends on how you determine churn. It’s a sensitive area that starts from the onboarding process through the entire customer journey, even if they’re a dedicated customer. This professional guide will provide you with the best practices for reducing churn, so you can have healthy customers and a healthy business.
1. Turn Trial Users into Paying Customers
A trial period allows your customer to try your products and services before making a commitment. The goal is to take those trial users and turn them into paying customers. The best way to do this is to run a retention rate analysis to determine the length of time customers stay before leaving. Find out the number of days, months, or years between the time they signed up and the time they left.
Then, compare the previous actions of converted trial users to churned trial users. What characteristics or behaviors did they display? Find that moment when a customer decided to take action on his or her part. Conduct several A/B tests to see which ones converted the fastest. Trial periods can help increase conversions, which can add time to the sales and marketing process.
2. Improve the Onboarding Process
Loyal customers are more likely to stay in your business. It’s easier to use your products and services than to find someone else. That’s why it’s so important to keep them engaged during the onboarding process, the beginning stages when the customer is using your products and services for the first time. You want to set high expectations by offering more than your competitors do.
Here are some ways to improve the onboarding process:
- Mapping out the customer journey
- Guiding them through setting up your products or services
- Educating them on the features of these products or services
- Answering their questions in a timely manner
3. Offer Exceptional Customer Service
Exceptional customer service is the key to reducing customer churn. Customers know they’re going to have questions and problems with your products and services. So, this is the perfect chance to help them out. This also creates additional opportunities to receive feedback on your branding, messaging, products, sales, services, and support.
For example, you can offer free live chat on your website. Or, you can encourage your customers to provide feedback on your e-mail newsletter or order confirmation page. You can also encourage feedback and monitor reviews on social media. They can become some of your best brand advocates.
4. Increase Customer Engagement
Onboarding customers is easier than engaging with them. There is a term called activity churn in which customers are still paying for your products and services even though they’re not actively engaged with your brand. If they no longer have a need for your products and services, then they’re most likely to leave. How do you keep them around and keep them engaged?
You can focus on creating engaging e-mails that attract their interests. Or, you can send them a friendly reminder to inactive customers about the features of your products and services. Other engagement options include in-app notifications, phone calls, and social media messages. Customers who are not using your products and services also qualify for this area.
5. Listen to Your Customers
Listening to new and existing customers can give provide you with new opportunities. Customers who are more likely to leave your company don’t just drop off. They either experience a drastic drop in activity or allow their credit card to expire. As you monitor these activities and notice any patterns, you can increase engagement through discounts, educational content, free offerings, and reactivation e-mails.
One way to engage with customers is to let them add other users to their account for free. This is a great way to introduce new customers and encourages existing customers to use your products and services. You can monitor this engagement through analytics tools such as Google Analytics and Hotjar. You’ll also notice what lead to this increase churn.
6. Create Educational Content
Your products and services may be great, but they can’t provide value if your customers don’t know how to use them. Your responsibility is to educate them on an ongoing basis. This includes creating content such as infographics, guides, templates, tutorials, and videos. You want to make those resources available so your customers knows where to refer to them.
You should also gently remind your customers so they can make the most out of those resources. This will increase the value of your products and services. This also provides a self-service, which allows them to learn about your products and services on their own. One of the best resources is having a knowledge base that adds new features and expands on existing ones as the platform grows. It should be easy to navigate so that customers can find the answers to their questions.
In order for this to work, all of your departments need to work together. That includes your engineering, marketing, product development, sales, and service teams. Consistency is key to increasing the customer lifetime value (CLV) and reducing customer churn.