12 Ways to Prevent Customer Churn [Part 2]

Note: This post was originally split into a two part series. The full article, which lists all 12  ways to reduce customer churn can be found here.

7. Target the right audience

No matter how sophisticated all of your retention tricks are, they may all go down the drain if you are attracting the wrong audience. What I mean here is – if your first interaction with the customer is about “free” and “cheap”, then you risk to attract the people who are not looking for the value you provide. These “freebies” collectors are the most likely to leave.

It’s better to target those who appreciate the long term value of products and see investing in good quality as an advantage. You’d better address those.

8. Give better service

You anticipated this tip earlier, didn’t you?

Yes, it is the most obvious method of keeping customers by your side. In fact, poor customer service is the leading case of customer churn. According to the 2011 Customer Experience Impact Report by Oracle, the two main reasons of why customers leave the company are incompetent and rude staff and unbearably slow service. Churn because of poor service stands at 70%, according to Forum Corporation’s research.

Why do customers leave?

And we are not talking here about really bad service. Sometimes an average customer experience, or what can be called a “meh” experience, is a trigger for churn. You simply showed nothing to hook that customer on. So, make sure that you provide stellar customer service that makes customers, above all, happy.

9. Pay attention to complaints

Complaints are like tips of the icebergs – they suggest that the bigger part of the problem is hidden from your view. Did you know that 96% of unhappy customers don’t complain, and 91% of those will simply leave and never come back?

A typical business hears from only four percent of dissatisfied customers

So, you’d better take complaints seriously and act on them, and in this way prevent customer churn, because, as Strauss & Seidel claims, dissatisfied customers whose complaints are attended to are more likely to remain loyal, and even become advocates, than other average customers.

10. Offer a long term contract

Next, how about extending your customers’ commitment? Instead of the month-to-month contracts, try offering a longer subscription model. In such a way your customer will have enough time to implement the product and see the benefits of using it. And once they see the benefits, they are more likely to commit to the product.

11. Make your best people deal with cancellations

To save a customer who is about to churn is certainly not a mission impossible. But you will have to call on your best sales skills to achieve good results in keeping them.

Find out who your best, most vocal and convincing sales reps are and give them the task to talk to those who decided to leave and prevent customer churn. You certainly can make use of their charisma and experience in dealing with difficult situations and dissatisfied customers.

Sometimes it only takes a good listener who is eager to walk in the customers’ shoes to change things around. According to the customer satisfaction survey conducted by Customer Service Group, the majority of respondents said that being heard and respected are more important than having their issue resolved.

12. Flaunt your competitive advantages

Finally, how different are you from your competitors? What makes you stand out? What will your customers lose if they decide to quit?

Answering these questions will help you define your competitive advantages and then flaunt them more. Competitive advantages are like honey that glues your customers to you. Analyze what it is that you do better, differently or more innovatively than others. Now think – do your customers know about it?

If not, it might be high time you told them.

It’s YOUR job to make them stay

Now that we have established that you simply cannot afford to lose customers, it is better to focus on being a keeper. That means that your customers have to clearly see why it is better to keep you and stay with you instead of leaving.

And you’d better be proactive in how you prevent customer churn by creating the conditions in which customers would clearly see and make use of the benefits your products offer.

Keep in mind that 80% of a company’s future revenue comes from just 20% of its existing customers. You can’t deny that is a lot.

It is also worth remembering that the importance of customer service in keeping customers by your side can hardly be overestimated. According to Forum Corporation research, “Almost 70% of the identifiable reasons why customers left typical companies had nothing to do with the product. The prevailing reason for switching was poor quality of service.”

All in all, keeping your customers is not magic. It all boils down to analyzing the reasons behind churn and then acting on them. Communicate with customers and involve them with your products, improve your customer service levels and make sure they see what they are gaining if they stay with you, rather than stray away from you.

Next steps

Looking for ways to prevent customer churn?

Then download our free guide to customer loyalty here.

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