5 Tips to lower your company’s Churn Rate
Understanding the impact of Churn’s rate on your company’s health can make all the difference in keeping it strong and competitive in the marketplace. It can generate excellent insights and strategies for the marketing and business team. Churn Rate is the percentage of customers who stop using a service in a given time period.
To calculate the Churn Rate of a company, simply divide the number of customers who canceled the service by the number of customers at the beginning of the same month. For a company to grow, its growth rate (percentage of new customers acquired over a given period) must be higher than the churn rate.
How to keep the Churn Rate under control?
In healthy companies, it is recommended that the Churn Rate does not exceed 7%. Increasing this ratio means fewer leads, less business, and therefore less profit and investment.
In such cases, it is necessary to monitor the client’s route until cancellation. It is worth keeping track of what they say about their services on social networks, NPS and other satisfaction indicators, as well as performing good post-sales work, closely following the needs that the client may have.
Check out tips to lessen this inconvenient rate.
1- Align, capacitate, train: prepare the sales team well
As Lincoln Murphy, a specialist in customer success, says:
“Churn seeds are sowed early.”
Our tip is to consider three steps: train your salespeople to correctly identify the customer profile, improve their performance consistently with sales coaching, and make them aware of the importance of going after customers whom they will succeed with, meeting their needs, and being transparent about possible results.
2- Customer Success e Support
You need a quick way to solve problems, and the best of them is to have a Customer Success team. The role of a professional in this area is to anticipate these problems and ensure that customers always have good results with the product or service they have purchased. They may also collect suggestions for cutting the service in the future.
Support is also a fundamental part and must always be available to reinforce the use of the service and to answer possible questions. Your support can stay in touch with the customer via email, chat, phone, social networks, teach through webinars and help manuals, conveying attention and care.
3- Track social networks
With the empowerment that social networks generate, comments can impact business results. Do not just measure the Churn Rate at the end of each month: track weekly social metrics such as tweets, comments, engagements, and website and blog entries.
4- Critical point of use
If customers who have paid for the service are not using it often, they will at some point cancel your subscription. The company needs to get new subscribers to learn and get used to using the service until they reach the critical point of use, an index that measures whether new users learn and reach a certain level of use of the tool.
5- Run Satisfaction Surveys
Satisfaction surveys are a useful tool for controlling churn. Check out some pointers:
- Ask the reason for the cancellation. Understand what happened to prevent it from occurring again.
- Run the Net Promoter Score. (Don´t know what NPS is? See)
- Do not ask too much, this can make the customer angry.
- Leave space for suggestions.