What is churn and why does it happen?
Customer churn is a measure of how quickly a business loses customers. It is expressed as a number or percentage of customers lost during a specific time period. All businesses experience churn, but if you are experiencing high churn rates this is a cause for concern – directly impacting customer lifetime value and bottom line business growth.
Adopting an ethos of customer centricity can help reduce churn.
In the banking world, sales and marketing is all about customer retention, even for newly acquired customers. Outside of the financial services sector however, these efforts are focused more on finding new customers rather than keeping existing ones.
According to Marketing Metrics, winning new business is over ten times harder than upselling or cross-selling to existing customers already familiar with the company they are buying from.
Put simply, there is little sense in chasing new business opportunities if existing customers are moving on. This makes a very solid case for keeping your existing customers happy.
The good news is that introducing customer centric sales and marketing strategies, that place customer needs and customer curiosity at the heart of all activities is proven to reduce churn and increase satisfactions ratings.
Some businesses simply add new customers to their portfolio and expect them to stay there. But why would a customer be loyal to a business they have bought from only once, especially when competition for their business is so immense?
Closing a deal is not ‘job done’, but instead the beginning of the customer lifecycle. From day one your focus must be on building an enduring relationship.
Likewise, customers see loyalty in terms of the product/service performing as advertised, and the value gained by using it over the lifecycle.
Conversely, vendors believe a customer is loyal if the product remains installed and the renewal is paid.
Winning a renewal deal doesn’t guarantee loyalty if the customer renewed because:
- Switching suppliers can be a painful process
- They’ve invested heavily in the product already
- The product has been integrated with other systems
Loyalty is accumulated over time, based on the customer’s experiences with your business and the product/service you provide – if it doesn’t deliver the value promised, or the relationship with you doesn’t meet expectations, then the customer is unlikely to renew.
What steps can you take to help reduce churn?
Low churn rate winners are those businesses who take an active role in ensuring the success of the customer and establishing a two-way relationship highlighted by regular, timely and relevant engagement to ensure they achieve maximum value and return on investment.
Maximise loyalty and retain customers by:
- Keeping promises and focusing on the value delivered
- Providing an excellent customer experience at every touch point
- Being customer curious throughout the lifecycle by understanding their evolving needs, market pressures, pain points, goals and ambitions
- Implementing account based after sales care and marketing, rather than a generic one size fits all approach
- Educating and connecting with users via timely, targeted and meaningful two-way interactions
- Reviewing the product and service mix to find a combination most responsive to their needs
- Calling customers to find out why they are leaving and learning from your mistakes
How Artesian can help reduce churn with customer centricity
Artesian provides contextual, relevant insight into companies and their markets in real time, helping you get to know your customers better and giving you a competitive edge when it really matters.
Artesian gathers information on industries, organisations, individuals and topics from millions of sources and uses clever algorithms to filter and transform the information into commercially valuable insights that you can share with your customers to keep them engaged throughout the lifecycle.
With Artesian, you can track your customers, prospects competitors and partners, spot business opportunities and manage risk. Early warning that a customer is likely to churn gives you the opportunity to get in touch and turn the situation around.
Artesian helps customer curious businesses increase credibility, competitiveness and customer satisfaction…and ultimately, revenue.