There’s not a single business on the market that can doesn’t deal with this issue. Some people call it customer churn while others call it “customer attrition”.
Either way, the definition is the same. Fortunately, as a business, you can find out what this means, and how does it happen and we will give you tips to prevent it from happening!
So, stay with us and put an end to your struggles!
What’s Customer Churn/Customer attrition?
First things first. The definition.
The most basic definition you can get is that customer churn is the percentage of clients/customers who stopped doing business with your brand in a given period.
Remember the times when your business was flourishing? It was excellent, right? The profit was high, and you were expanding on the marketplace exactly as you like.
But, suddenly, this changed. Most of the time, businesses do not have a clue and don’t even know where it “leaks”.
Don’t worry though.
You can start from here. Since businesses are established on data and relationships, you always need to calculate. Accurately.
For instance, let’s assume that you’ve started your month with 1000 customers. At the end of the month, you got 980 customers.
So, you have lost 20 customers. According to the formula, you divide 20 by 1000 and multiply it by 100.
The result is 0.02 ~ 2%.
Hopefully, you already know how to calculate it, so let’s move on.
Why did your customers churn?
This is the million-dollar question. However, there are a million factors that contribute to this happening.
That’s why we will try to bring you the most important ones.
#1 Poor Customer Support
Quality customer support service is one of the greatest ways for making your customers stay loyal.
Customers can have an in-depth “picture” of your brand by the way you interact with them. Aside from your marketing message.
Because of this, many businesses on the market have their own or outsource customer support services.
For your information, these can be inbound or outbound customer support services.
You can read more about which industries use these services here. At the same time,
According to a study made by Forbes in 2018, U.S. companies lose more than $75 billion a year due to poor customer service.
This is too much. At the same time, this shows why customer support matters.
So, improve the way you interact with your customers, or you will likely end up losing them to your competitors.
#2 Wrong Target Audience
The biggest mistake businesses make, especially new ones are pursuing the wrong target audience.
Yes, the marketplace is huge and you can have many potential customers. That’s where you go wrong.
Firstly. identify which audience suits your business the most. Then instead of focusing on “all-types-of-customers” focus on those that will likely convert to your service.
As time passes and your business grows, find the ideal tempo and then expand – in a smart way.
By doing this, you will save a lot of money that will be destined to be lost on nothing. Meanwhile, your Return Of Investment (ROI) will flourish.
Chances for customer churn will decrease as well.
#3 High Employee Turnover Rate
Having a high employee turnover rate is one of the factors for increasing the chances of customer churn/customer attrition.
Why? Because “doing business” means creating and maintaining relationships.
Customers play a valuable role in this.
Have you ever had excellent customer service? Did you call the brand once again? Or, had a chat/call with the employee you remember that solved your issues?
That’s what we are talking about.
Let’s assume that there’s a business that has a high employee turnover rate. What happens? A lot of money is spent on training, and for what reason?
On the other hand, your employees can’t even build business relationships with your customers.
#4 Ignoring Complaints
There isn’t a perfect product or brand. Businesses are aware of this, but not all of them can accept constructive criticism.
The customer is always right, and therefore, as a company, you should always listen to them.
Modify your product/service, introduce customers` ideas, and try to put them into practice. In case, your services or products stopped giving them value like before, well, RED ALERT!
This is the reason why customer churn occurs, and why businesses start to have a hard time.
*Did you know that it costs five times more to attract a new customer than to nurture existing ones?
#5 Failure To Offer Real-Time Support
Nurturing your existing clients and responding to their inquiries is essential for your business. At the same time, this is essential for acquiring new ones.
What happens if your business does not offer support after business hours? You lose customers. Customer attrition starts to occur and your competitors leverage this.
There are many channels through which you can offer real-time support. Social media, e-mail, live chat, and calls are only a few of them.
Some businesses go a step further and introduce video call support. Be innovative.
Conclusion
Early detection of “customer churn” is essential for your business growth. By now, you already have a clue what the reasons for this happening might be.
Therefore, do your part – be innovative, proactive, and actively listen to your customers.
Constantly figure out new ways to offer them a greater value. In a long run, this will surely bring you more loyal customers.
Do not hesitate to contact us if you seek quality customer support services. We are available at your service, at any time! 🙂
Follow us: