Did you lose clients this month? What about the past 12 months?
It’s normal to lose some customers as their needs change, but more concerning is when they no longer see the value in what you offer.
Customer churn is the percentage of customers that leave your business. It’s calculated by taking the number of clients you lost in a time period (month, quarter, year) and divide it by the number of customers you had at the beginning of that time period. The bigger the percentage, the worse it is. What’s very telling in a company is the churn trend over time; is it increasing or decreasing? A decreasing churn rate is a good thing!
How can you keep that churn rate low?
These are the top 3 types of marketing activities you can focus on to increase customer retention, grow sales and the value of your company.
1 – Be proactive – Reach out to clients to offer genuine help. Explain what more they can get from using your product or service. Ask questions, offer training, show a genuine interest in helping your client succeed. Sometimes the help is unrelated to what your business sells and that advice presents you as a valued and trusted partner.
2 – Deliver a solid experience/product/service – Does what you offer match what you sold them? Are you overpromising and under-delivering? Ensuring you deliver a product or service that meets, or exceeds their expectations, is crucial to keeping clients coming back for more. Remember that just around the corner is a competitor that is looking to grab your clients with something better.
3 – Stay in touch regularly – When clients don’t hear from you…you are out-of-mind. That’s a dangerous place to be. Reach out by phone, have coffee, or send an email newsletter (hint, hint) that keeps you top-of-mind. Come across as friendly, engaged and frank in sharing information to help them grow their business.
Within these three main categories there are dozens of activities you can undertake to decrease your churn rate and keep those customers close. Imagine if you had a churn rate of near zero? What would your business look like today? How would you feel about that?