6 Little Changes That Will Make a Big Difference in Your Churn Rate
You know what’s really fun? Pretending like you work in a perfect organization that sells a must-have product or service and enjoys a loyal customer base and a 0% churn rate. You know what’s slightly less fun? Realizing that all the pretending in the world won’t turn that dream into a reality.
The good news is that minimizing churn rate isn’t quite the mysterious and overwhelming process it can sometimes feel like. With a few straight-forward implementations and adjustments to procedure, your customers will look forward to doing business with you and will find themselves returning time and again.
Here are our 6 tips for minimizing your churn rate…
1. Spread a positive internal attitude among employees.
Have you ever dealt with a really, truly, deeply unhappy customer service provider on the phone? You can usually tell by the way they present more problems than solutions, more no’s than yes’s and basically make you hate their company as much as they likely do.
There’s no incentive for these customer service reps to go out of their way to make clients happy because no one in the company is going out of their way to make employees happy. In some cases, employees are actually prohibited from spending “extensive” time helping customers or from making independent moves to rectify a client issue.
Right now I can easily list at least five brands I’ve interacted with over the past year where this was my experience. And you know what? I ditched them all.
Richard Branson famously said, “Take care of your employees and they’ll take care of your business.” It’s because happy workers – people who enjoy coming to work and are proud of the job they do and the brand they represent – want to share the positivity they feel for their company. They’ll want everyone from prospective clients to ten-year loyalists to share their excitement, and will therefore go above and beyond to drive satisfaction and minimize the churn rate.
2. Communicate openly and regularly with customers.
Many companies reach out to their customers only when they need to. This commonly includes immediately after a sale, with announcement a policy change or with news of a shift within the company. Rarely do companies touch base “just because”, and it’s shocking because many customers complain that it’s difficult to find support when they need it.
In addition to having easy-to-locate and easy-to-navigate help portals, brands should occasionally reach out to customers with the goal of simply opening a communication channel. Ideally, these messages should also be personalized, which bring us to…
3. Personalize communication to create stronger bonds.
Personalized communication goes beyond using someone’s name. It means recognizing when someone’s been a customer for five years vs. five months and adjusting messaging accordingly. It also means presenting solutions that are uniquely relevant on a per-customer basis: sharing helpful how-to Personalized Videos following a specific purchase, cross-selling popular add-on or related products, reminding customers to take advantage of a warranty or free service.
It’s bringing the attentiveness of a mom and pop business to scale through smartly implemented, trigger-based touchpoints. Personalized e-mail communication receives 29% higher open rates and 41% more unique click-through rates. Conversely, 56% of consumers say they unsubscribe to brands’ e-mails when the content is irrelevant.
Additionally, whenever possible, resist sending emails from a firstname.lastname@example.org address. If someone has a question or response and cannot easily keep the chain of communication in motion, they’ll grow frustrated.
The lesson here is to personalize communication on both sides – send your communication from a specific individual (or group of individuals for a scalable response system) and allow someone to simply hit “reply” if they want to reply.
4. Stay humble. Be aware of competitors.
Once upon a time, Blockbuster was everyone’s preferred destination for a movie rental and a box of microwave popcorn. They were like Starbucks – every neighborhood had one and they were pretty much always busy.
Then came along a crazy little start-up called Netflix, a subscription-based DVD rental service that eliminated late fees and offered a competitive alternative to Blockbuster’s $5-a-pop 2-day rentals.
Firmly established as King of the Video Rental, Blockbuster didn’t immediately take competitive action. By the time they launched their own online rental option, their churn rate was through the roof as customers sought Netflix’s ease and affordability. In 2007, Netflix delivered its billionth DVD (around the same time they were shifting their business model to on-demand video streaming). In 2010, Blockbuster filed for bankruptcy and in 2013 the last store closed its doors.
Learn from Blockbuster’s mistake and don’t ignore the scrappy guy pitting himself against you, no matter how big and successful your brand is. Realistically evaluate what solutions new companies are offering to customers and see if they hold any competitive threat to your model.
5. Continue adding value to your brand.
The best defense is a good offense. Hardly a new concept, but one that businesses should embrace, lest they wind up like our friends at Blockbuster. Constantly evaluate your offering and target potential weaknesses. Add value where you can, present solutions that people never knew they needed and then make it so they can’t live without them.
Imagine going to a video rental store today only to find the movie you wanted is out of stock? Or if videos could only be viewed on your home TV, not your phone, computer or tablet?
You may be staring at your screen with wide eyes thinking I’m some kind of insane luddite. But not so long ago, videos were frequently unavailable at the rental store and you couldn’t consume video beyond your TV. The need-to-have of today is the nice-to-have of yesteryear.
Be in the business of providing answers, ease, advancements and ahead-of-the-curve offerings, and your customers won’t have a reason to defect to anyone else.
6. Ask Customers Why They’re Leaving
The fact of the matter is that even the most wonderfully communicative, customer-focused, forward-thinking companies still experience churn. When the time comes that someone stops doing business with you, ask them why. Knowledge is power and negative feedback is an excellent opportunity to reveal weaknesses in your operation.
Organizations issue their employees exit interviews as a way of learning from possible mistakes, do the same with your customers. By presenting a few (less than 10) open ended questions or simply asking “How could we have done better?” you’re opening the door for valuable insights to reduce further churn. Never be afraid of the truth.
More like this…
Want to see what Idomoo’s Personalized Video as a Service Platform can do for you? Please click below!