5 Tips for Quickly Reducing Customer Churn To increase loyalty, businesses must realize that their relationship with the customer does not end with closing a sale, that's where it actually begins.
By Syed Balkhi Edited by Dan Bova
Opinions expressed by Entrepreneur contributors are their own.
So you've successfully made a sale by converting a lead into a customer. Both you and the customer are happy. But, suddenly this customer decides to cancel the subscription and stop using your product after only a couple weeks. What happened? Where did things go wrong?
This is a common problem many online businesses encounter. Customer retention is just as important as generating leads and sale. Especially for SaaS businesses that sell subscription-based services and products.
Most businesses assume that their relationship with the customer ends after closing a sale, but it's where it all begins. Apple sold $52.6 billion worth of sales in Q4 2017. That's a 12 percent increase from the previous year. The reason behind Apple's continuous success is its loyal and passionate customers who not only love Apple products but appreciate their after-sale services.
Even if your business sells one-time products, building customer loyalty towards your brand is the only way you can get people to buy your products over and over again. Here, we'll give you a few quick tips on how to reduce customer churn and to build long-lasting customer relationships.
1.) Use a CRM software.
Continuing to keep your relationship strong with customers after the sale is an important part of building a loyal user base. While email automation provides a great way to keep in touch with your customers with effort, it's not enough.
This is where CRM (Customer Relationship Management) software comes in. CRM software allows you to collect and store your customer information for easier management.
Related: Why Your Retail Business Needs CRM Software
It also lets you record customer interactions such as email discussions, social media interactions, and much more. This allows you to understand your customers better so that when a customer is about to cancel a subscription you can address the problems they were having and offer solutions to keep them from leaving.
Was the price too high? Did they struggle to learn how to use the product? Learning about the problems your customers were having will provide you a chance to improve your product to keep your other customers from leaving as well.
2.) Offer excellent customer support.
Customer support is the most important part of any business. Yet, it's also the one challenge most businesses fail to live up to.
There are modern startups and businesses that still provide customer support via email and phone calls, where they take more than 24 hours to respond to an email or where you have to waste time and money waiting hours on the phone. These are the kind of things that frustrate users and motivate them to leave.
It should be much easier for your customers to find a solution to a problem they are having. It can be as simple as sending a Tweet or a direct message via Facebook. Or providing live-chat support on your website with friendly and experienced staff.
Related: The Many Unheralded Perils of Automating Your Customer Service
Today, it's easier than ever to notice when a customer is not satisfied with a product or a service. They usually take to Facebook or Twitter to share their frustration. As a brand, you can reach out to these customers and offer solutions by staying active and alert on social media.
3.) Reward your most loyal customers.
Imagine if a company sends you a free gift card or free access to a premium product just for doing business with them. A generous gesture like that is enough to send a customer over the moon. You can use this same tactic to build trust and loyalty.
This is not a costly process at all. Many businesses already have their own unique customer reward programs that not only to encourage users to keep using their products but also to bring in new customers for free.
Dropbox used their referral program with this strategy in mind. Whenever a user referred the platform to a friend, the platform awarded the user with 500mb of free cloud storage space. Within the first 18 months, Dropbox received 2.8 million referral invites. Thirty-two percent of all Dropbox user signups now come through the referral program.
4.) Offer discounted extensions.
Businesses that offer free plans or free trials of products often encounter users who tend to leave when the trial ends or they try to stick with the free plans forever. You can get these users to switch to a better plan by offering a small bribe.
You can send this bribe in the form of a discount. For example, Evernote encourages its free users to upgrade to its Premium plan by offering a 40 percent discount. You can use this same strategy to keep users from leaving by offering a discounted price to extend their subscriptions.
Related: Understanding the Math Behind Discounts: Are They the Right Choice for You?
Creating YouTube videos and blog posts showing the awesome features of your paid plan is another great way to get users interested in your premium products.
5.) Ask for feedback.
You can't keep everyone from leaving. Some users will leave no matter what you do to try and save the customer. The wise thing to do here is to learn from them by asking what went wrong.
This is the main reason why you often see feedback forms when you unsubscribe from an email list or decide to cancel a subscription to an online service.
Polls and surveys are also great solutions for learning more about what frustrates your customers and finding out what kind of features they would like to see in your future updates. Recognize customer churn before it's too late and take necessary action to prevent it. Establishing a plan to increase customer loyalty will help you save a lot of revenue while creating a group of passionate customers.
