All business owners are aware of the dreaded customer churn. Customer churn is when customers you’ve been working with drop off and you need new ones to fill their place. This mostly affects companies that run on some type of subscription model, be it software, services, or monthly products. And it can be a doozy.
The last thing you want is to feel like you’re on a hamster wheel for customers: You get new ones, then old ones drop off. You get new ones, then old ones drop off. It makes sustainable business growth feel borderline impossible. You want your products or services to speak for themselves, and having constant customer churn makes you feel as if people are dissatisfied. It also leads to an immense amount of time and energy being spent on marketing your business.
Customer churn is always going to happen—not every customer who buys from you is going to last forever. But there are ways to better understand customer churn. If you’re tracking your numbers in an effective way, you’ll be able to see churn coming and understand how to slow it down. Knowing your numbers can also help you convince customers who have signed up for a free trial or similar promotion program to stay on long term.
Here are four analytics you should be tracking to understand your customer churn rates and, hopefully, slow them down.
Which product or service features are people using? For instance, if you’re an accounting software company, are your customers taking advantage of the fancy tracking metrics you have in place? If not, start brainstorming ways to get them hooked.
Your features are one of the key selling points of your product; if people aren’t utilizing them often, it means they’re not going to reach the results you’ve sold them on. Maybe they need a personal phone call to walk them through getting the tech set up or a webinar series on the various features of your product. Perhaps your content marketing could contain more how-tos or customers could sign up for an e-mail series that gives them feature walk-throughs.
How much your customers are really relying on your product or service is an important indicator of customer churn—if someone is using very few features but paying full price, he or she is likely to drop off.
It seems obvious: The more satisfied customers are, the longer they’ll stick around. But how do you actually measure customer satisfaction? This can be a conglomerate of multiple analytics, from customer satisfaction surveys to the number of complaints you receive to the length of time you spend elbow-deep in customer service calls. It’s up to you and your specific business model to find a way to measure your customer satisfaction, but once you’ve decided on metrics, stick to them!
Measuring how well customers are perceiving your business is essential to being able to predict customer churn. Low customer satisfaction is going to mean a high churn rate, which provides opportunities for your company to see how you can improve your customer service structure. Having high-quality customer service agents in addition to a solid digital customer service strategy is what will propel your customer service to the next level.
The quickest way to get someone to unsubscribe or cancel future purchases with your business is by making the person feel unheard or uncared for. Customer service will always be an important foundation for increasing revenue, and lowering your customer churn rate is no different.
How well are customers doing on their own goals? E-mail marketing software ConvertKit decided to start tracking how much money its customers were making through e-mail in addition to how much ConvertKit as a business was making, giving it a fresh perspective on helping customers achieve their goals.
If a product or service is working for a customer, he or she is going to continue paying for it. But if it isn’t, it’s going to be the first thing to go when the person looks at his or her budget. So finding a way to track how well customers are doing on their goals, whether through a survey or more personalized interaction, can be extremely helpful when it comes to understanding your customer churn rate.
Think of how pleasantly surprised your customers would be with an out-of-the-blue phone call asking how your product or service is helping them. You could answer any questions, learn what you could be doing better, and hear about how your product or service is making an impact on their life. A slightly less personalized idea? Implement some kind of goal-tracking game whereby people can update their progress in a public forum. For instance, if you sell a fitness app, something like a Facebook group where people could share their goals for public accountability could go a long way.
How often are customers really using your product or service? You want your customers to be hooked, whatever that looks like for your business. If it’s a subscription delivery, are people signing up for frequent boxes of product? If it’s a software, are people logging on daily? If it’s a news source, are people getting notifications sent to their phone? With your specific product or service, you should be able to see how often people are using what you sell.
The more a part of people’s life or business your product is, the more vital it will seem to them and the less likely they are to cancel. Increasing your current customers’ usage frequency is an essential part of lowering customer churn.
You know your specific product or service. How to go about accurately measuring and increasing these data points is going to depend on what you’re selling. But no matter what industry you’re in or which niche you cater to, making sure your customers are using your product or service in totality, using it often, walking away satisfied, and achieving their own goals are the four steps to lower your customer churn rate.