Customer Churn Strategy: How to Use Data to Keep Your Customers from Leaving

Not only do you need to attract customers but you must also keep them from leaving. Discover why your customer retention strategy should be based on data.

Every business, both new and seasoned, spend a lot of time and effort finding and attracting new customers. You need not only attract customers but also keep them from leaving – in other words, to prevent customer churn.

It happens to everyone. There is no business out there that has not lost customers, there are even churn benchmarks that can tell you whether your churn is within the “healthy” limits, which are between 5-7%.

Still, a business should always strive to keep its churn rate as low as possible and find ways to retain customers. Research shows that the cost of getting a new customer is about five times the cost of retaining an existing one. But did you know that a 5% increase in the retention rate can give a 25-95% increase in the profit? It’s surely something to aim for.

Which data can help you analyze and prevent churn?

 Your customer retention strategy should be based on data, and the data you gain from your business metrics can help you greatly. For example, you can monitor the following trends to detect patterns for customer churn prevention.

Customer retention team

Number of support tickets

Turn to your support team and see how many support tickets they get on average.

In the context of customer churn, both extremes should set alarm bells with you. Too few support tickets usually mean that your customers, in general, are not engaged with your product or service enough. Too many tickets, on the other hand, indicate that your product is difficult and not intuitive to get started with and use.

Reasons for customer complaints

Again, this is where you need to work with your customer support team.

They can help you identify the most common complaints and issues that customers come to them with. If customers regularly find the same issues with your product – and, mind you, 96% of unhappy customers don’t complain at all, they just leave silently – this means their experience was not great.

Engagement rate of marketing activities

Low engagement may be the cause of customer churn. If they respond poorly to your marketing efforts, they will not engage fully with your product. As a result, such customers are rather unlikely to achieve success with your product and have a high chance of leaving you.

For example, if you are targeting the wrong audience, customers will not see the value of your product for them. Even if they do some business with you, they might not want to continue, as they have never realized the benefits of your offering.

User journey and experience analysis

Analyzing your buyer’s journey can help you identify exactly where and how churn occurs:

  • Voluntarily, when customers cancel your service or stop using it
  • Involuntarily when their purchase could not be completed for various reasons
  • Customers switch to a lower tier of the service or product

How to prevent customer churn?

Armed with the data received from your monitoring efforts, you can see what makes customers leave and what you can do to prevent them from leaving.

Analyze the most frequent complaints

Your customers’ complaints are clear indicators of what may be wrong with your product that can ultimately cause them to leave.

Review the most frequent ones and take measures to improve your offering accordingly:

  • If your customers complain about very basic things, especially at later stages of using your product, this means they have not come to full adoption and are not enjoying it yet. Check your onboarding flow to make it clearer.

If most of their complaints concern product usage, see if you have sufficient support resources. You might want to include or improve your knowledge base, set up an FAQ page, and provide other educational materials to showcase your product and make customers comfortable using it.

Review your user journey 

Customers can drop off because of their user journey being unclear, difficult, or insecure. Use journey mapping tools to see how users move around your website, understand which features they use and don’t use, and where they spend more time than usual.

For example, a lot of customer churn happens at the checkout stage – almost 70% of customers abandon their shopping carts before completing the purchase. The reason can be that the checkout process may be overly complicated, require too many personal details, or fail to provide sufficient security. Make sure you implement a reputed payment gateway to make customers confident during their purchases.

Use engaging marketing techniques

Focus on churn prevention in implementing your marketing ideas. An engaged customer is less likely to leave you than a customer who is not fully engaged. 

Here are a few ways you can  improve your marketing campaigns to stop customers from abandoning you:

  • Highlight competitive advantages in your marketing activities. A good idea may be hinting at what customers might lose if they leave you.
  • Plan an engaging email marketing campaign attracting customers’ attention with special offers, incentives, catchy newsletter subject lines.
  • While focusing on retaining the existing customers, don’t forget about bringing in new ones by increasing your social media presence, expanding your email database through smart email popups, and encouraging referrals.

Email marketing techniques evolve constantly, so you should experiment and test to find which works best for you. The key thing is to always keep your ear to the ground – follow industry leaders, attend email marketing conferences, monitor the competition.

Creating engaging marketing techniques

Focus on your best customers

You have to accept that you are going to lose customers, no matter what you do. Therefore, in your churn prevention efforts, do not try to keep each and every one. Rather analyze your customer base to identify your best customers.

There may be different definitions of a “best customer”. It can be the customer who is with you the longest, or who brings you the highest revenue, or who makes the most effective referrals. In fact, you can have all of these, and they are the ones to whom you should pay the closest attention.

Be proactive in communicating with such customers. Ask them for their feedback, offer them special conditions, invite them to a loyalty program, and, most importantly, make sure that they get the level of service that they expect from your company. By creating a positive experience with such customers, you can not only prevent them from leaving but also get new ones through word-of-mouth advertising.

Review your product and pricing strategy

As trivial as it may seem, sometimes churn happens because your product or service is not up to your customers’ expectations. See whether the most frequent complaints are about the product quality and easiness of use – if so, take steps to improve it.

However, there may be another reason for customer churn – the price. You can get this insight from customer feedback, surveys or from the fact that customers try to switch to lower service tiers. In this case, you need to either adjust your pricing strategy to become more competitive or focus your efforts on highlighting the product values.

Provide outstanding customer service

Poor service is often named among the reasons for customer churn. Indeed, a business is most appreciated for the way it handles customers’ issues.

Make sure your customer service is top-notch by:

  • Providing as many communication channels as possible – email, live chat, ticketing system, cloud phone system
  • Enabling your support agents with sufficient and up-to-date product knowledge to provide quality service.
  • Setting up comprehensive self-service resources for customers to browse.
  • Collecting feedback.

Conclusion

In fighting customer churn, identifying your weak points is already half the battle. If you collect and analyze your customer data and find what you can improve, you will have little trouble developing an action plan