Churning refers to the discreet loss of customers from a larger customer base – defined as the percentage of customers that stopped using your company’s product or service during a certain time frame. Customer churn is one of the most important metrics for a growing business to evaluate, which is calculated by dividing the number of customers lost during a specific time period, by the number of customers you had at the start of that time period. While it’s not the most positive thing to measure, churn analysis can give your company clearer insights about customer retention for better business prospects.
Your enterprise should strive for a churn rate that is as close to 0% as possible. In order to achieve this, your company has to be on top of its churn rate at all times and treat it as a number one priority. Even minor increases in churn rate percentage can adversely affect your company’s revenue/growth in the long-term.
What to do with churn data?
It is normal for a company to lose a few customers along the way, but not taking proactive measures is what may hinder progress altogether. Evaluate how and when churn occurs in a customer’s lifetime with your company.
As with all forms of analysis, successfully analyzing your churn requires you to consistently keep track of the right data. Setting the right KPI-oriented goals can help you get a closer look at what is causing your churn. How? The key is to focus on nurturing current customer relationships and to increase overall customer satisfaction to prevent further loss. Acquiring new customers is far more costly than keeping existing ones – stay focused on improvements to secure their loyalty.
If your customer support team is receiving fewer tickets than usually recorded, than it may mean one of two things: either you are doing everything perfectly or, it’s a sign of customers’ lack of engagement. Perhaps they no longer feel inspired by your services to seek support to fix the problem they are encountering. Attention to detail is crucial. Address strategies to help re-engage with customers who believe they are no longer getting value out of your product/s.
Use churn data to predict future churn customers. Preventative measures will ensure better outcome for your business. Marketing collateral can be leveraged to enhance your brand identity. After potential churn customers have been identified and customer segments have been created, the next step is to proactively reach out to nurture pre-existing relationships, and to attract more specific types of customers respectively.