6 secrets to enhance customer retail rate

6 secrets to enhance customer retail rate

A service subscription business cannot survive on acquisition alone. It’s not an effective way to grow because acquiring customers is seven times more expensive than retaining them.

Today’s customer journey goes well beyond the transactional moment, and there are still more and more opportunities to earn revenue after the initial purchase. This means you must do everything you can to extend the lifetime value of your customers before they leave.

Fortunately: many of your customers don’t want to leave you, and within your control, typically, only 15 to 30 percent of your customers go. Dealing with these customers at the right time for the right reasons and providing a path for them to stay is the key to reducing churn.

While churn rates vary by industry, preventing customer churn is a company-wide responsibility at the companies we surveyed.

Eighty percent of companies reported that they have a company-wide churn prevention goal. However, B2C companies (85%) are more likely than B2-B companies (69%) to have company-wide responsibility for customer retention. In contrast, B2-B companies are more likely to have a churn prevention goal for specific departments.

I. Tip 1: Push a survey before each customer leaves

Cancellation is a critical moment in the customer lifecycle, rivaled only by the moment of purchase, but it remains a blind spot for most companies. When your customer indicates they want to cancel, their expectations are not being met.It’s not too late to step in and help them find out what they wanted when they signed up in the first place. Collecting data and feedback at this critical time can enable your team to make improvements to reduce future customer churn.

You may think that there are already many ways to collect customer feedback in the industry, and yes, Net Promoter Scores (NPS) and in-product surveys are standard methods used by most companies. However, it’s not enough to conduct surveys while the customer is still a customer.

When a customer cancels, they send a message with their wallet – and to effectively reduce churn, you need to know why. Surveying customers at the moment of cancellation is an untapped opportunity because.

1,you only seek feedback from customers when they reach certain milestones, which leaves valuable information

6 secrets to enhance customer retail rate

You need to know what’s going on with the customer, whether they’ve been paying for three days or three years.

2,Here’s the actionable data

20% of customers cancel services for the wrong reasons. If acted upon immediately, you can influence one in five customers to stay

3,customers are willing to provide honest feedback

If you intervene at this point to get other reactions from customers besides cancellation, they may change their answers for a variety of reasons.

4,Your customer base covers a broader area

To make decisions, you need to collect data broadly and in aggregate. The more diverse your customer base is, the more critical it is to communicate with as many customers as possible. With direct survey push and feedback, you don’t have to rely on the sales and customer success teams to relay the reasons again.

Think of the cancellation action as a funnel.

When customers begin the cancellation process, you can survey them to understand their reasons for canceling and immediately mobilize your team to action. Just as companies identify, market, and convert leads, you can use customer cancellation actions to gather information, provide targeted service and reduce churn.

Build this funnel by pushing a standard survey form at the moment of a customer’s cancellation. A step further is to develop a product/service to identify at-risk customers and provide a personalized cancellation experience based on customer segmentation, such as a detailed bill after a customer cancels.

This is ideal for automating the customer retention process (e.g., notifying customer service to contact the customer or sending alerts to the right team) and saving engineering resources associated with integrating survey data.

Talking to every customer who cancels will give you the insight you need to improve your product, but only if it is systematically categorized.

Second, Secret 2: Clearly understand why customers leave

6 secrets to enhance customer retail rat

When customers are investigated at the moment of cancellation, the reasons for their cancellation should be categorized.To create categories from scratch, start with unstructured, open-ended content that asks customers to describe in a text box why they are canceling their service – this is qualitative data. Still, when the answers are collected, you can categorize the reasons and prompt customers to choose from a list in a later survey push.

When defining categories, consider which people are affected by the feedback. Ask yourself: What actions will you take based on this information? Often, this data is most valuable for product improvement, customer and market intelligence, service feedback, monitoring market sentiment, or identifying new avenues for growth.

Categorizing causes has three significant values to a company.

Everyone in the company will speak the same language about customer churn, and you can revisit why customers cancel service time and time again and gain new insights.
It is easier to identify which parts of the business need investment to be more successful in retaining customers.
You can assess the impact of efforts and investments overtime on customer churn, especially when viewing data disaggregated.
If you regularly include this information in company reports or use revenue types as part of your organization’s KPIs, you can also delve into revenue segmentation. Ask customers to identify the types of product services they subscribe to and how often they pay or use a tool as a customer management solution that automatically collects this information.

Each company looks at customer churn data differently, but they usually come to the same conclusions about causes and categories. In general, these categories look the same across business types and industries.

Third, Secret #3: Access churn data to critical data centers

The key to displaying customer churn data throughout your organization is to ensure that the data is delivered to a system of record that is easy to expose, analyze and manipulate..Most companies have multiple tools to capture data on product usage, customer feedback, payments, and support services, distributed across sources (e.g., customer relationship management systems, product analytics, customer success records, business intelligence platforms, etc.) and departments.

Data dissemination across sources and departments results in time delays between data collection and action.

When there is a discontinuity between data sources and analytics, even simple customer retention behaviors may not be achieved.

For example, customers give feedback that their reason for canceling a service is related to price. This information is held in a data capture mechanism, such as a survey tool or a product owned by the product department. Still, the ability to reach and contact the customer is in a completely different system, such as CRM, which is the responsibility of the sales and customer success departments.

If a customer’s needs are met, it may influence them to stay. With some consolidation of resources and a proactive team member, that customer can be reached with a special deal or discounted package. But as the time lapse between customer feedback and company action grows longer, the likelihood of a customer coming back becomes less and less likely.

Even with a great deal of customer insight, it can be challenging to organize your team around retention opportunities and improve the customer experience. If you can’t easily find and determine why a customer is leaving, the churn cycle repeats itself.

Customer retention efforts can be synchronized across multiple teams, so the accessibility of data ensures regular and frequent sharing. As the data set grows, you can always review trends and customer base characteristics and empower teams to use customer churn data as a critical driver of product and company improvement.

4,stomers by Actionability
Actionability measures your ability to engage customers and get a response that meets your goals.

In many cases, the goal is not to get the customer to cancel, but it may be to convert a trial into a paid account or allow the customer to expand the opportunity

6 secrets to enhance customer retail rate

Segment your customers based on Actionability to focus your resources on those likely to respond and learn from those who can’t or won’t.

1,Voluntary vs. involuntary chur
One way to segment based on Actionability is to determine whether churn is voluntary or involuntary.

Voluntary churn occurs when a customer leaves voluntarily, that is when they click the cancel button or contact technical support to prepare to cancel the service.

Involuntary churn occurs when a customer does not intend to leave, but other objective factors arise, usually related to a payment issue such as an expired credit card. Voluntary churn accounts for the majority of churn in most businesses – an overlooked opportunity for retention growth.

2,Influenceable vs. non-influenceable

  1. Another approach is to define a situation where you believe that a particular case will not churn a customer if you can satisfy an unmet need. This is referred to as impactable and non-impactable churn.

This segmentation is essential to remind the right team to deliver the desired product to the customer. The implementation focuses on “who, where, and what” to meet the customer’s needs. Over time, you can optimize these elements.

Tip 5: Retain customers with personalized, reason-based offers

Actionability only works if you offer the right suggestion, at the right time, for the right reasons, in the right channel, to an influential customer. Doing so addresses the customer’s unmet needs and provides a way for them to stay.These alerts should trigger an approach to the customer and a new collaboration, and the partnership will look different depending Actionability only works if you offer the right suggestion, at the right time, for the right reasons, in the right channel, to an influential customer. Doing so addresses the customer’s unmet needs and provides a way for them to stay.on the offer.

Offer help to customers to retain them based on their data (type of service/product purchased, etc.), the reason for cancellation, and the goals of the promotion, such asTip 5: Retain customers with personalized, reason-based offers
Actionability only works if you offer the right suggestion, at the right time, for the right reasons, in the right channel, to an influential customer. Doing so addresses the customer’s unmet needs and provides a way for them to stay.

Discounts based on eligibility
Temporary account downgrades or suspensions
Free services or “let us set you up.”
Training videos
Live chat support
The offer is to do what you can to retain revenue that would otherwise be lost. If a customer doesn’t have time to set up, consider putting that user directly in touch with a customer service representative or training specialist. These seemingly insignificant actions produce complex results.

As you track the effectiveness of your offers, you can identify the reasons for increased Actionability and offers that have proven effective and eliminate those that do not reduce churn.

VI. Tip 6: Make the revenue saved your retention KPI

Customers who accept the offer and decide not to cancel the service (called deflection) are directly attributed to income held, and a high deflection rate can be significant to your bottom line; the longer a customer continues to purchase the service, the more revenue they will continue to generate in savings.Deflection can be thought of as a new source of retained customer revenue without the cost of advertising or sales. Therefore, it should be tested and optimized like any other income-generating activity.

The following are areas where you should collect data and make changes to increase retention revenue.

Surveys: personalize them with dynamic fields for names, companies, or attributes unique to the customer.

6 secrets to enhance customer retail rate

Reasons for cancellation: distinguish actionable causes from non-actionable reasons, track open-ended comments, and mine and explore new reasons.
Segmentation: tracking Actionability based on customer attributes (billing, usage period, value, and product usage).
Offer strategy: defining which offers (discounts, conferences, etc.) will attract customers and ultimately lead them to stay.
Managing workflow: finding the most effective channels for promotion.
Product improvement: find problems in customer feedback on your products and focus on progress.
Seven, a systematic approach to retention
There are hundreds of ways to retain customers, but no definitive method can be applied to all industries. Instead of looking for holes in the lifecycle, take a systematic look at customer retention.These six tips represent a methodology that says the best way to retain customers is to improve the overall service cancellation process experience while retaining customers who may have been impacted.

By taking a systematic approach to measuring churn and retaining customers, you can gain new insights into customer needs and improve retention metrics to accelerate revenue growth and profitability.

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