Efficient CX With Effective Churn Reduction Strategy.

If the COVID-19 pandemic has taught us anything, it is the danger of focusing excessively on new customer acquisition.?

With the disruptions brought about by the pandemic and subsequent lockdowns, companies across the world realized that a growth machine built on a customer acquisition mindset cannot be sustained in times of crisis. In fact, studies show that content production and product development both skew heavily toward the domain of acquisition as against retention.

The imbalance can be attributed to the emphasis placed by investors and founders on scaling startup efforts as quickly as possible. This approach ignores a crucial point: healthy customer growth.?

The impact is excessive churn.?

Why Should You Care About Churn Reduction?

Churn refers to the proportion of subscribers or contractual customers who opt out of their purchases over a specific period of time. Churn is usually calculated as the proportion of customers lost during a given time period compared to the number of customers at the beginning of that period.?

The probability of selling to an existing customer is 60-70%, while the probability of selling to a new customer is only 5-20%. Some of the reasons why it is critical for businesses to take churn seriously are listed below:

• Churn reduction safeguard existing revenues
• Churn reduction forms the foundation for revenue growth as it is far easier to sell more to existing customers than to sell to new customers.?
• Churn reduction also contributes to second-order revenue.?

Excessive churn is a silent killer of companies’ potential and an important benchmark that companies ignore at their own peril.

How Can You Prevent Churn?

Despite your best efforts, you should remember one thing: customers are going to churn.? While churn-less growth is a myth, there is something you can do to modulate it.?

Drill Down to the Specifics of Why

As a metric, churn rate provides a high-level picture that must be disaggregated to get a clear understanding of customer behavior. Hence, companies should use every case of churn as an opportunity to map out patterns at the individual and aggregated levels.?

Look for patterns in the time of cancellation, product usage, support or service interactions. Ask whether there are other factors that can be discerned across cases of churn? Or what are the stated reasons for customers to leave??

Combining patterns in collected data with feedback from churned customers can provide a clearer understanding of when and how churn occurs, which customers are most at risk, and how they can be incentivized to stay on.

Effective feedback mechanisms are imperative here. Automated feedback emails are one simple way of gaining such feedback.?

Let’s Stop Churn in its Track

Rapid saturation of sales and marketing content has made it easier than ever for customers to take their business elsewhere if their growing expectations are not met.?

Churn reduction forms the foundation for revenue growth. But such an approach cannot just consist of sporadic emails or calls at each renewal point.?

Deep dive into the various facets of a customer-centric churn reduction strategy in this guide.