6 Ways to Minimize Customer Churn

We've discussed how to find the source of customer churn. Figuring out the source of churn is the easy part. When it comes to actually minimizing the churn, that’s where the hard work comes in. There is a theme to understand before we dig into the nitty-gritty. You have to be willing to go above and beyond for your customer. The “bare minimum” will never be enough to keep clients for the long term. You can’t be the business that stands up confidently says to the world, “We’re a business that’s here too.”

1.) Grouping Customers

There are customers you want and customers you don’t mind loosing. There are those who won’t ever go and those who will leave if someone winks at them the right way. Your job is to figure out which is which. To begin, create a categorization system (if you can) for your customers. You only need two items to group by – RISK and VALUE.

Low Risk – High Value clients and customers are inherently nicer and better than High Risk – Low Value clients. To best get an idea of where your customers are – plot them on the chart below.

If you notice you have a lot of “high risk” clients or “low value” clients – then the way you approach new business needs to be addressed to manage your churn and lower it.

2.) Using your Data

You KNOW what someone just bought. You KNOW what that product/service will do for them. How can a customer get more life from that product? How can a customer get more value for that product? If you can bridge that gap for them then to a customer you're not a provider but a success enabler, or a value giver. Once you change they way they view your business you can position yourself as a bigger asset.

But how do you do that? With data. When you leverage the data on your customers you can do more, provide more, and be more for them. You can go far above and beyond. Quite possibly the best example of going “above and beyond” with data is Target accurately determining a teenager’s pregnancy in 2012.

Now don’t go accusing teenagers of being pregnant, but what Target did was preemptively address a customer’s valid need, based on their data, and meeting it head on to solve a need before it’s a problem.

Use your data to remove a customer's potential roadblock to success and prepare them for what's next.

That is above and beyond.

3.) Relationship Marketing

Email, social media, customer service, all of it matters. How you engage and how you interact with your customers matters. It matters to them. Let’s look at the company Chewy, for our example here. Every Christmas, my dogs get handwritten Christmas cards from Chewy. On their birthdays my dogs receive handwritten birthday cards from Chewy. How many thousands of customers does Chewy have? How many cards do they have to write per day? How much carpel tunnel do they have in house?

It’s something small and to many it may be something silly, but to some (like me) it matters. My dogs are part of my pack. Someone took the time to address and write a card….to my dogs. That means something to me. That is the epitome of “above and beyond”.

But why? Because it builds a relationship. It creates a personal aspect that’s above and beyond the “bare minimum” of “buy my stuff”.

If you’re an agency or have recurring clients – why not have each employee write a handwritten note each month to a client. It could be a thanks, it could be “I wanted to see how that thing we did is working for you” or it could be “congratulations on (fill in the blank)”. But it goes above and beyond and ads a more human element for both of you.

On social media are you engaging with your customers and clients or just posting our own stuff? In email marketing are dialing into your customers interests, wants, needs, likes, and (even) humor…or you are grouping every customer into one bucket and blasting them with banality?

I mean that, if you’re sending “tire discounts” to someone who just bought tires, you’re banal. If you’re promoting a service to a customer that has already bought that service then you’re banal.

More than that, you’re also irritating and annoying. You’re not listening, you’re not paying attention, you’re not adding value or meaning. You’re a source of churn.

Your relationship marketing should focus on just that – building and growing a relationship. Because a customer you have a strong relationship with. With a strong relationship – a high value customer will be more forgiving and loyal.

4.) Accept That Your Hiring is the Problem

Occasionally who your customer is engaging with may be the problem. Imagine a customer hanging up the phone after talking to you or leaving your location and saying, “Man I’m so glad I talked to them about this.” Is that the reaction your team brings out in customers?

Picture this: you’re planning a two week trip from Ohio to Colorado and Arizona. You plan to drive north to South Dakota and then work your way south hitting the sights before heading home. You know you need to gear up, but you’re not sure what you need.

You walk into REI, you’re greeted and you explain your situation. “Hold on a second let me get the right person for you,” the associate says. They call over a specific someone who guides you down the process of what you need, what you don’t and ways you can save money by knowing where you can skimp and where you shouldn’t. They focus on your needs and wants.

But then they take it a step further. That person takes an interest in your plan. That person calls over two more people who listen to your plan. They then ask, “what is it you want to get from your trip?” You want to see the sights and see natural beauty, you reply. “Oh well in that case, here’s some sights you should see,” they declare as they pull out a map, marking it left and right.

Suddenly you realize your path was wrong – this path sounds awesome and now you’re totally re-assessing your path and suddenly you’re spending a week in Utah. This actually happened to two months ago, by the way. To me.

The associates assessed my wants and needs and dialed it down to, “what are you really trying to do,” and then went all in on that. They excitedly (and knowledgeably) talked to what the journey was and what could be done with it. Their excitement and knowledge bred more excitement and (maybe accidentally) more purchases.

That wouldn’t have happened if someone just pointed to the tents and backpacks.

Maybe you’re not a store. Maybe you’re a website development company. A customer calls in and says, “I want a new site.” You could say, “okay cool, let me ask some more questions and get you a price on it.” Or you could say, “Okay cool, why is that?”

Your staff needs to suss out the actual needs. It could wind up that client doesn’t need a new site. They need someone who knows how to make the site actually work to its potential.

Once your staff is capable of providing value outside of the product, you’re able to go above and beyond to minimize the churn. Why? Because you’re showing them that you can provide support, ideas, and value beyond a product.

5.) Incentivize What You Can Incentivize

We have already discussed the importance of using customer data and its use in relationship marketing. But once you’ve properly segmented those audiences what do you do with them? Don’t just blast the same message to each audience. Customize it. And heavily incentivize it.

Make the incentives too good to pass up. Deep discounts and opportunities are always popular. But they have to be on things people will almost salivate over. They have to be so good that customers won’t want to pass it up.

Gamification can be a wonderful way to keep people active and involved in your brand. It can incentivize the actual use of your product or service. Score points that you can trade in for discounts and services has been utilized by everything from phone providers to restaurants to grocery stores.

Use your data and your products to grow use of other products, keep people engaged with products, and (more importantly) keep people coming back.

6.) Use Your Detractors to Provide Better Products or Services for Your Target Market

“I just don’t like you.” We hate to hear it, we refuse to accept it, but it is a honest truth. Not everyone is going to like you. That’s okay. But why don’t they? Once again, use your surveys to target people who don’t like your products and find out why. What is it they don’t like? How can you change it without changing the core of what you are?

Sometimes people will use you simply because you’re there. Other times they just don’t have a choice and they use you because you’re the only one there. Destroy churn by always working to get better and improve you offering. Stay at the forefront and be the leader in what you do.

How often do you see or hear an add for Porsche? How many people buy them? How many people have bought multiple Porsches over their lifetime? They are a brand who knows who they are and who they serve. They strive to give their target what their target wants. They use their products to create brand ambassadors.

So does your brand naturally create its own ambassadors? Why not?

These were just some tips to help you manage and lower your churn, but there are as many options are there are businesses. We would love to talk to you about your churn. If you’re interested in seeing us in action, contact us today.