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Proven Ways To Reduce Customer Churn

Getting your customers to stick around is a tough task for any business. And when they do start to leave, coming up with ways to reduce customer churn rate can be even trickier.

Why customers decide to look elsewhere for their products varies. 89% of customers will look elsewhere after one bad online experience. But it could also be down to price, a poor product, or a lack of value for the customer. Competition is such that customers don’t have to tolerate a bad experience, they can just go elsewhere.

Of course, there will always be some level of churn but there are things you can address to ensure that it stays at a low rate. 

Your customers are leaving your business for a reason. So you need to identify the problem and rectify it. Testing your site and ensuring a positive user experience is a good start. And making sure your communications with customers are valuable and interesting also helps.

There is massive value in concentrating on reducing churn for businesses. A 5% increase in customer retention can lead to a minimum profit increase of 25%. So it is definitely worth your time.

However, there are many other avenues you can take to reduce customer churn.

How To Reduce Customer Churn

Your use of data

Your customer data is one of the most effective tools you have to reduce customer churn. How you use your data will determine how successful those efforts will be. 

A comprehensive customer database gives you everything you need to better understand your customers. Especially if you’re able to integrate purchase history and your product database.

Studying data gives you vital information about your customer, their journey with your business, their buying habits, and more. If you’re not using it to inform your campaigns, then you’re missing out on opportunities to re-engage with your audience. .

A successful campaign begins with an objective. What do you want your customers to do? While placing an order is an obvious goal, consider others like signing up for newsletters or joining a loyalty programme.

Next, you need to understand what your customer wants to see and hear. Fortunately your customer data has all that information. That means you can personalise messages based on their interests, creating an overall better experience for them. And in turn, reducing the possibility of churning.

Identify Valuable Customers

Reducing churn means redirecting some of your energies away from acquisition. 

While new customers are essential to grow your business, a solid base of loyal customers is where the profit lies. Not least because they’re significantly cheaper to convert.

Increasing retention by 5% can increase profits by at least 25%. 

Filter your customer data to find the customers who have placed more than one order with you. Then drill down to find those customers who haven’t purchased in the last 3-6 months, but who met or exceeded your average order value.

Those are the customers you want to target. Re-engaging with this specific cohort can yield big results for your business.

Remember, if you treat all customers the same way then your customers will disengage completely.

You need to segment your customers by wants, needs, behaviours, etc. Then following that, create campaigns that apply to them. 

The Customer Lifetime Value (CLV) also comes into play here. Keeping CLV in mind is important for two reasons.

  1. It puts your average cost of customer acquisition into context. Let’s say you’re spending $100 to gain a new customer. Understanding your CLV helps you to work out how long it takes to recover your investment and turn a profit. Seeing your marketing and sales costs in this light can be an eye-opener.
  2.  It begs (and actually answers) the question; if we hold on to our customers for one extra year, how much more profitable will we be? This is a powerful incentive to invest more in keeping churn rate low through customer engagement and retention campaigns.

Provide an Excellent Service

When it comes down to it, customers want to have an amazing experience with any business they come across. If they don’t get that, then they won’t come back.

Providing excellent service starts at the very beginning of the customer journey. Whether it’s when they first visit your website, clicks on an ad, or engages with you on social media. Your first impression means a lot and can influence whether customers stay on your site, let alone purchase.

80% of companies worldwide believe they provide an amazing service from the get-go. But, only 8% of consumers actually agree with them.

You need to be absolutely sure that your service is top quality from the very beginning. Ensuring that’s the case is a good way to reduce customer churn. A happy customer is much more likely to part ways with their money for your product if you provide the service they want.

Reward Loyal Customers

Customers who come back to you time and time again should be nurtured. There are plenty of benefits you can offer customers to give you repeat business.  While there is a cost attached to this, investing in loyalty programmes can yield significant returns. 

Almost 70% of consumers say that loyalty programmes influence their choice of retailer. If they see the benefit of purchasing with you, they will return on a consistent basis. Especially if they are rewarded for doing so.

Rewarding loyalty is a win-win situation. Your customer feels closer to your brand and more appreciated. While your business maintains a steady flow of income and spends less money on customer acquisition.

Ask for Feedback (and act on it)

Your customers want to be heard. Time after time companies send out feedback surveys, only to make no changes at all.

It becomes little more than a data harvesting exercise. Which would be fine if the companies in question use that information to better engage with their customers. But they invariably don’t. Customers can see through this and will take note of when they are not being heard.

There are few better ways of maintaining customer relationships and brand loyalty than making them feel heard.

Listening to unhappy customers at the point of churn can also help to save those relationships. These customers often offer the most valuable insights as they no longer feel loyal to you, so have nothing left to lose. Listening to their opinions may help to make you a better company. As well as keep them as customers.

Following up with customers after things go wrong helps keep your brand perception in check and improves retention.

Campaigns to Reduce Customer Churn

Being in constant, but not overbearing conversation with your customers 

reduces customer churn. If you don’t interact with them regularly then you’ll cease to be relevant.. It’s the lack of relevance that is the deciding factor when a customer leaves.

Below are two types of campaigns that you could consider introducing as part of your customer retention strategy. 

Abandoned Cart Recovery

There are plenty of reasons why a person might not complete a purchase and leave their items in their online cart.

About $18 billion is lost by eCommerce businesses globally every year. So, your approach to recovering abandoned carts is vital in securing more revenue.

Cart abandonment rates range between 60% and 80%. Send emails, web pushes, in-app messages and even traditional SMS linking customers back to their pre-populated baskets.

One message to the person who abandoned the cart could easily turn them into a customer. This is down to the personalised experience you have given them. You may have possibly even offered them free shipping in return for completing the purchase.

This goes back to making customers feel rewarded for buying with you and is a good method in reducing customer churn.

Re-engaging to Reduce Customer Churn

Re-engage lapsed and dormant customers through intelligent, data-driven interactions. Use your detailed customer profiles to engage them with offers that you know are likely to appeal to them.

Identify users with a high Lifetime Spend and reward them with exclusive deals and exciting offers.

These are just two ways that you can use a customer data and engagement platform to boost retention and loyalty. 

To learn more about Xtremepush and how we can help you reduce customer churn, get in touch with the team to request a demo.

About Xtremepush

Xtremepush is the world’s leading customer data and engagement data platform. We work with various top brands within the eCommerce industry. Schedule a personalised demo of our platform to learn more about how we can help your brand drive repeat customers and increase revenue.

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