Churning customers is when a business loses its subscribers after time as they do not wish to renew or continue to benefit from a product or service which they have committed to.
Churning is the process which can destroy a business. And it is often a sign of no sustainability. Short term aspects look good but if they can’t continue, there is no tangible business.
Churn is the most frustrating thing for so many businesses who have worked hard to build a customer base, but like anything, commitment going forward is never guaranteed. Your marketing department is generating new leads and the sales team is making the conversions. But it is a picture of a leaky bucket. Constantly being filled with these new prospects, but slowly, it is leaking out of the holes.
The holes are the problem points which your business is failing to address. And often, it is because they are concentrating on filling up the bucket (a beautiful short-term situation). But neglecting to patch the holes.
A balance is required which adds to the becket, but also keeps what went in to the pot before, there for a longer-term. It is a substantial factor for revenue and growth.
This post provides a complete guide to understand churn rate, the major reasons and how you can reduce customer churn rate for your business.
What is Churn Rate?
Churn rate is opposite to retention rate and is defined as when a customer or clients stops buying from a certain business. This shows the customers, for whatever the reason is, have decided to end their relationship with the business and case subscribing it anymore.
Prime Reasons of Churn Rate
There are a number of reasons for churn rate and when it increases. Some of the most important reasons are listed below.
- Weak relationship of the business with its customers
- The company offers bad customer services
- Poor on boarding and this is irritating for users
- Promising more than what a business can do
- Overprice is also one of the reasons
- Being less competitive and sticking to old products
How to Reduce Churn Rate?
- Analyze Churn Rate
First you need to track down and find the relevant data regarding churn rate of the customers. This data will help you understand why and when customers stop buying your products or services. In order to proceed and fix it on right time, you should have detailed information on how this happens.
- Know the Competition
We said that when brands become less competitive, customers move to other brands. So you have to know the market trends and competition in your niche. If a brand is doing better than your business, you should check what they are doing and how they have improved their products or services.
- Engage Customers
Educating customers about your products does matter. How can you expect to get more customers when users can’t understand what your products do or what benefits they have? So you should provide complete guidance to the users and engage them in your business. The better they know, the more useful it will be for a business.
- Improve Customer Service
Poor customer service is one of the reasons why customers stop visiting your stores and buy anything. Customer service has a huge impact. Many brands are preferred by customers just because of their customer service. So you have to invest in your staff, train them, educate them and tell them to respect the customers.
- Offer Incentives
If you don’t know how to attract customers and offer incentives to retain them, you should not expect to hold onto a business anymore. Such people fail. You have to be creative. Offer incentives to your customers. Introduce promotions. Help them in any way possible and this can be when a customer wants to return some products for any reason and the brand cooperates.
- Get Customer Feedback
Customer feedback is imperative for a business. Without knowing what customers want, expect from the business or they need in products- you can’t improve your services and products. Always connect with the customers and listen to them. The companies must incorporate valuable customer suggestions in their products to make them more user-friendly.