The most profitable businesses are those that can keep their customers long-term. The longer these customers stay around, the more profitable they end up being. If you want to turn a significant profit, your customers must stay with you even longer.
Many subscription-based companies end up burning money on customer acquisition only to find that most of them are churning down to not being happy with your service or going to a competitor offering something better.
What is Churn and How it Affects Business Growth?
Churn is the percentage of customers that leave or stop using your service over a period of time. It’s important to know how many customers you’re gaining and losing, as well as why they may be leaving. Customer retention plays an equally important role in business growth as much as customer acquisition does.
It’s critical to investigate and understand why customers have left so that you can improve your product or services accordingly. More importantly, you must retain your customers long-term, which means keeping them happy – not just for weeks – but for months and years after they have signed up initially.
Why Churn Happens In the First Place
There are several reasons customers choose to leave. Their needs change or their existing solution is no longer good enough for them. Perhaps the cost of using your product is too high or there’s a new competitor that offers better product. Sometimes, customers leave because they feel mistreated, or your team doesn’t communicate effectively with them.
By taking a look at why customers churn, you can learn a lot about what works and what doesn’t work for your product and also helps you to improve the overall user experience allowing your company to make improvements to keep current customers from leaving in the future. Even if you don’t get all of your customers back, taking steps to find out why they left will help retain more in the long-term.
How to Combat Churn in 5 Simple Ways
Is churn inevitable? Should you just give up and see how things play out? No, you can’t just sit back and hope for the best. Luckily for you, there are certain things you can do to combat churn. Here are 5 simple ways to do it.
Make Sure Your Product is Great
If your product isn’t something people start to rave about, you can be sure there will be churn. Your service needs to solve a problem for the customer and make their life easier in some way. It should bring them value and be worth paying for. When you offer good service and an excellent product, customers won’t want to leave because they know it would put them back at square one while also wasting their money.
Be Transparent About Pricing
If your pricing is fair but still leaves room for improvement, potential customers are going to take note of that too. If you provide good products or services but don’t have the price point properly balanced yet, attracting new business can become more challenging than you expect.
Always Get Customer Feedback
One of the most important things you should do when you’re introducing any new business or product is to gather customer feedback. Find out if customers are satisfied with their experience so far and determine whether other improvements can be made. Look at what changes need to happen immediately, as well as long-term plans for the future.
Upsell Upgrades and Subscription Plans
Offer upgrades and other subscription plans to your customers that will not only increase their value but also their retention. Depending on what it is, they may end up spending more money with you over time and enjoy the perks you offer through different product packages. Try offering a premium version of your service for an extra fee, so customers can feel as though they’re receiving added benefits from being loyal to your brand.
Incentivise Customers Who Stick Around
You need to give something back to those who stick around even when others have left already. Incentive programs provide benefits for customers who stay longer and reward them with items or discounts based on how long they have been using your services. This method of retention is particularly powerful, as it encourages subscribers to keep using your service even if just for the incentives you provide repeatedly.
Understanding The Churn Rate To Increase Retention
When you’re running a subscription business, it’s important to keep churn in check. There are several steps you can take to combat the issue, ranging from improving your product to fine-tuning your retention strategies. You have to do what you can to provide subscribers with an experience that is worth keeping for the long term so they don’t leave because of problems with your service or product.
Contact Evolok today and find out how our technology can help your business grow creating a platform that keeps your customers coming back for more.