If you're a business owner, you want to keep your customers around as long as possible. Customer churn refers to the customers that quit using your product or service after a set period of time. Even if you were to increase your customer retention by 5 percent, you could see an increase in profit by 25 to 95 percent.
One way to prevent customer churn is to identify a group of already existing customers that are likely to stop doing business with you in the future and refocus your marketing efforts on them. There's a flip side to this, though. Some argue that focusing on your best customers and getting them to increase their business or continuing to stay on is the best idea.
Another way to prevent customer churn is to ask them for feedback on your products or services. By doing this, you can address customer frustration from the get-go, rather than taking a hit when they decide to take their business elsewhere. Customer feedback can be measured by sending online surveys or rating requests. You can also offer incentives to longtime customers like promo codes or loyalty programs. These have been found to reduce customer churn by around 15 percent.
Keeping in communication with your customers can also help. If your customers are made aware of new product launches, new ways to utilize their products/ services, they are much more likely to stick around.
You can prevent customer churn by analyzing churn as it happens. When you find the source of the churn, you can find strategies to prevent it in the future. You can start by figuring out when churn occurs. Does it happen 30 days after people sign up for your service, or is it 90 days? If you sell products, you can figure out if there is something faulty with your product to see if that's why people are leaving.
As a business, it is also your responsibility to stay competitive in your market. If you are no longer offering the best products or services to your customer base, then you are no longer giving them an incentive to stick around. If you find new ways to innovate, you may further stave off customer churn.
