Customer Churn: Identify and Stop
Posted: Tue Dec 24, 2024 6:44 am
What company hasn't experienced customers breaking off contact with them? Customer churn is what we're talking about. Churn rate is one of the essential business metrics that any company keeps a close eye on.
Fractus is ready to help solve the problem: analyze the outflow and offer solutions.
Customer Churn: Specifics
Refusal to interact with a company, expressed in the interruption of all contacts and resulting in financial losses for it - the outflow of customers - this is what it is in all its negativity.
Measured over a certain period by the ratio of lost customers to their total number, excluding new customers. This is the CR coefficient – churn metric or churn rate. The standard indicator is about 3% for a stable business and about 15% for a beginner.
It is wiser to bring back the lost customers. After all, attracting new ones results in much greater expenses than retaining the existing ones. That is why companies create entire departments that perform the work of retaining customers and bringing back the lost ones.
Customer Churn: Specifics
Types of outflow
Conscious . It is based on a conscious choice in favor andorra email list 24290 contact leads of another product. The client chooses a more convenient and profitable option, usually going to a competitor.
Natural . Associated with personal life, natural causes: moving, change of residence, illness, death, change of lifestyle.
Hidden . Not exactly an outflow, rather a decrease in activity. Temporary visits to competitors, search for better conditions.
Reasons for leaving
Dissatisfaction with the service. According to statistics, about 70% of clients leave because of poor service.
Dissatisfaction with product quality.
Use of analogous products.
The best option among competitors. This concerns not only the product, but also the service and the impressions from contact with the brand.
Search for new solutions.
Personal reasons: loss of job, income, change in lifestyle.
Refusal of the product as a whole. For example, switching to environmentally friendly types of products.
Overpriced product.
How to Reduce Customer Churn
Find out the reason . The most effective way to find out the reason for leaving is to call the client personally. This is a signal to him about his value to the company.
Respond to the complaint . More than 90% of dissatisfied customers leave. Not a pleasant figure, is it? There is a chance to get them back by considering the complaint.
Apologize . Is the company's guilt undeniable? It's worth admitting it. It's better if the employee who caused the departure admits it.
Compensate for losses . Return of spent funds, goods, compensation for the cost of the service or a nice bonus, discount, gift.
Work on reputation . It is better to make efforts to do this from the very beginning of the activity than to restore a tarnished reputation.
Improve . Work on yourself, collect feedback , analyze your activities and eliminate those shortcomings that will lead to the loss of the consumer.
How to Reduce Customer Churn
Should we bring them all back?
There are customers who are of little use to the company. They are late with payments, buy little, take the cheapest products, are toxic or aggressive towards the staff. In this case, it is worth asking yourself: is their loss leaving?
Active users should be returned. Those who buy a lot, often and high-margin products, do not delay payments, are opinion leaders or other important persons.
Fractus will come to the rescue
Want to retain customers and bring back those who have left? A thorough analysis of customer churn is necessary, and Fractus will help with this. Based on the data, we will create an action plan that will help bring customers back and even turn them into devotees. And understand what to work on. Let's fix the problems together!
Join us and choose thousands of products for wholesale and dropshipping from Ukrainian suppliers for your business, upload products to your online store!
Fractus is ready to help solve the problem: analyze the outflow and offer solutions.
Customer Churn: Specifics
Refusal to interact with a company, expressed in the interruption of all contacts and resulting in financial losses for it - the outflow of customers - this is what it is in all its negativity.
Measured over a certain period by the ratio of lost customers to their total number, excluding new customers. This is the CR coefficient – churn metric or churn rate. The standard indicator is about 3% for a stable business and about 15% for a beginner.
It is wiser to bring back the lost customers. After all, attracting new ones results in much greater expenses than retaining the existing ones. That is why companies create entire departments that perform the work of retaining customers and bringing back the lost ones.
Customer Churn: Specifics
Types of outflow
Conscious . It is based on a conscious choice in favor andorra email list 24290 contact leads of another product. The client chooses a more convenient and profitable option, usually going to a competitor.
Natural . Associated with personal life, natural causes: moving, change of residence, illness, death, change of lifestyle.
Hidden . Not exactly an outflow, rather a decrease in activity. Temporary visits to competitors, search for better conditions.
Reasons for leaving
Dissatisfaction with the service. According to statistics, about 70% of clients leave because of poor service.
Dissatisfaction with product quality.
Use of analogous products.
The best option among competitors. This concerns not only the product, but also the service and the impressions from contact with the brand.
Search for new solutions.
Personal reasons: loss of job, income, change in lifestyle.
Refusal of the product as a whole. For example, switching to environmentally friendly types of products.
Overpriced product.
How to Reduce Customer Churn
Find out the reason . The most effective way to find out the reason for leaving is to call the client personally. This is a signal to him about his value to the company.
Respond to the complaint . More than 90% of dissatisfied customers leave. Not a pleasant figure, is it? There is a chance to get them back by considering the complaint.
Apologize . Is the company's guilt undeniable? It's worth admitting it. It's better if the employee who caused the departure admits it.
Compensate for losses . Return of spent funds, goods, compensation for the cost of the service or a nice bonus, discount, gift.
Work on reputation . It is better to make efforts to do this from the very beginning of the activity than to restore a tarnished reputation.
Improve . Work on yourself, collect feedback , analyze your activities and eliminate those shortcomings that will lead to the loss of the consumer.
How to Reduce Customer Churn
Should we bring them all back?
There are customers who are of little use to the company. They are late with payments, buy little, take the cheapest products, are toxic or aggressive towards the staff. In this case, it is worth asking yourself: is their loss leaving?
Active users should be returned. Those who buy a lot, often and high-margin products, do not delay payments, are opinion leaders or other important persons.
Fractus will come to the rescue
Want to retain customers and bring back those who have left? A thorough analysis of customer churn is necessary, and Fractus will help with this. Based on the data, we will create an action plan that will help bring customers back and even turn them into devotees. And understand what to work on. Let's fix the problems together!
Join us and choose thousands of products for wholesale and dropshipping from Ukrainian suppliers for your business, upload products to your online store!