How to Secure Customer Loyalty: A Discussion About Customer Churn

If you are in charge of retaining your company’s customers, you know the feeling of sadness when you hear customers telling you they are leaving.

The thought of an account closure can be no less than devastating to the accounting team and so many other people who work hard to keep relationships strong.

Kolsky concluded that customer churn can be reduced by 67% if companies succeed in solving customer issues during the first-time interaction and successfully managing customer expectations. 

It’s important to measure the customer churn rate to find out what methods you need to develop in order to keep your customers. Customer churn is something that all successful organizations are trying to avoid, or at least stabilize.

As Jeff Bezos, Founder & CEO @ Amazon said, “We see our customers as invited guests to a party, and we are the hosts. It is our job everyday to make every important aspect of the customer experience a little better. “

Read on for possible reasons why people might leave your business and how you can retain them with these helpful tips

A third of people say that a bad customer service experience is their main reason for churning. This could be a one-time experience, or it can be the culmination of smaller things that added up to sour this user’s opinion about your company.

Forrester Research found that 69% of people surveyed said that they choose to shop more frequently at retailers with consistent customer service. In order to prevent customer churn, a better program for supporting your subscribers needs to be in place

Let us first understand what customer churn is?

Every company has customers who churn. The churn rate is the percent of customers that leave a company.

Churn rate is an important indicator of a company’s health.

A high churn rate indicates that the company is doing something wrong. Knowing the churn rate is important to a company and can help them know where to improve.

Customer churn is the number of customers who no longer use a product or service, usually within a specified period of time. It is also known as customer attrition. This term is most often used to describe the reduction in the number of customers a company has.

There are four different types of churn:

• Late Churn: Occurs when customers end their service and renew it later on.
• Chronic Churn: Occurs when a customer switches long-term providers over time
• Acquisition Churn: Occurs when a customer stops buying products and services from a company
• Point of Sale Churn: Happens during the first 12 months of service

Causes: Lack of Engagement, Poor Service, Expensive Pricing, and More Efficient Competitors

Many companies experience revenue decreases immediately as a result of customer churn.

Identifying the reasons for customer churn is important since it will aid in improving the relationship with customers and reducing the rate of customer churn.

• The most common reasons for customer churn are due to increased prices, poor service and/or goods, unethical practices, or possible fear of the company’s survival.
• Some of these causes create customers that believe the price isn’t worth paying for a service or product.
• They may also feel like the corporate culture is opposed to their values or any other number of reasons.
• These are all good reasons to cut ties with a company and go in search of something better.

There are many ways in which a company can prevent customer churn. 

One of the most important things a company can do is listen to what customers want and need. This should be done through surveys, focus groups, and one-on-one conversations.

It is also important for a company to be open to suggestions from customers and to keep in regular contact with them.

The causes of customer churn can be broken down into four different categories. 

• Lack of Engagement: Engaging the customer with regular communication and staying in touch with them will help keep them from leaving you for competitors. There are customer relationships such as employees or vendors that have a negative impact on your company’s reputation.
• Poor service can also lead to churn. If a company is not taking care of their customers, the customer will likely move on to someone who does.
• Expensive pricing which can be fixed by adjusting pricing or even offering discounts and promotions as an incentive to stay.
• There is a disconnect between what was promised and what the customer actually received.
• There may be problems with the product or service itself. You might have under-estimated how much time it would take to fix these problems, which would lead to customer dissatisfaction.
• More Efficient Competitors: Finally, if there are competitors that offer more efficient services, it is hard to compete against them unless they change up their focus. Competitive pressures, meaning that customers are taking their business elsewhere when they’re not happy with your service.

How Customer Service Impacts Churn?

Many companies believe customer support is only necessary for customers with questions about their purchase or who need a return.

But, that is not true.

Customer service interactions are a crucial touchpoint which can act as an accelerant in the churn-reversal process, or create a new symptom of churn.

Leveraging your customer service to reduce churn as much:

Customer service affects churn in a way that’s quite similar to pricing. Particularly, when there are significant differences in customer satisfaction rates between companies, chances are good that customers will leave the low-rated company to find a company that provides a better customer experience. However, both have one thing in common: weighing the costs against the benefits is essential.

Customer service can take the form of live chat, email and phone. Choosing which customer care path is right for your business will depend on the needs of your customers. If you try to offer every form of customer service all at once, you’ll have trouble serving your customers well because it will be harder to manage and keep track of all interactions. For example, live chat offers a fast response time as long as you have the employees available to field questions immediately.

A CRM software can be a tool to help you retain repeat customers and expand your client base by increasing customer satisfaction. Experience the power of DialDesk today, which offers cost-effective and scalable solutions to reduce customer churn, enhancing business success over the long-term.

The bottomline:

Churn often has a direct impact on your bottom line. It’s the money you lose when a customer that has been acquired leaves your product. It’s the money you lose and will never be able to recover. When you have a churn, it’s time to start working on a churn reducing funnel. The churn reducing funnel is a term used to describe a system of building customer loyalty that ensures that the customers you have are more likely to stay.

Author Profile

Nitish Kaul

Nitish is a CX Solutionings Expert at DialDesk. He has helped provide our customers with fantastic services and made sure their needs have been met promptly. His knowledge of pertinent business strategies and his decision-making skills help add to the team dynamic by creating positive results for every project we work on. He knows how to get the job done efficiently.

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🔗 Tags: How to Increase Customer Loyalty by Reducing Customer Churn?, What is Customer Churn and How to reduce it?

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