Customer Churn is one of the most important metrics for your business.
After all, it is often more expensive to acquire a new customer than it is to retain one.
Today, we’ll discuss a few strategies on how to improve your customer churn rate.
What is Customer Churn?
First, a quick review of the basics.
Customer Churn is the rate at which your business loses customers in a set amount of time.
For example, if your business starts the month with 1,000 customers and loses 50 customers by the end of the month, that would represent a 5% churn rate.
The importance of this rate comes from the fact that a 5% improvement in your customer retention can signify growth in revenue of up to 25%.
Want to learn more? Read our guide on what Customer Churn is and how it affects your business.
Why your Customers Leave Your Business
The first step towards improving your customer churn rate is understanding why your customers might be leaving your business.
After all, you cannot solve a problem you cannot understand.
The reality is that there might be many different reasons why your customers are leaving your business. However, we’ve put together a guide on some of the top reasons why your customers leave your business.
What is Customer Retention?
Customer Retention can be seen as the direct opposite of Customer Churn.
For example, if your business has a 5% Customer Churn, then you have a 95% customer retention rate.
The higher your customer retention, the more customers are returning to your business and making repeat purchases.
Therefore, the best way to reduce your customer churn is to improve your customer retention efforts.
Want to learn more? Read our guide on customer retention and how it can help your business.
How to Improve your Customer Retention
Customer retention strategies can look different from business to business.
For example, an eCommerce company will use different strategies than a take-out restaurant.
However, the following are some of the most popular and effective customer retention strategies:
- Implementing a CRM and collecting customer data
- Increasing your value offers by offering bonus perks
- Personalize the customer return experience
- Create a Loyalty Program
- Create and foster a customer community
- Focus on customer success strategies
- Take up a socially responsible goal
- Use subscriptions to create commitment
- Focus on customer care
- Provide fast and efficient customer support
These are only simple descriptions of every single retention strategy.
Want to learn more? Read our in-depth guide on customer retention strategies.
Reducing your business’ customer churn can make or break your business.
How you decide to tackle this challenge depends on your resources and type of business.
However, keeping track of your customer churn rates should always be a top priority.