What Is Churn?
Churn is the number of customers that stop using a business's products over a given period of time.
Think of it as entering a year with a total of 1,000 customers and by the end of the year you've lost 100 of them; this would mean your churn rate is 10%. One thing to remember is that a business's churn rate doesn't factor in new consumers. This means that a business can have a high churn rate that may initially seem like a cause for concern; however, it can still be experiencing overall growth.
Why Is Reducing Customer Churn So Important?
Keeping hold of your customers is directly related to growing your business in the cheapest manner possible. A general rule of thumb is the higher your churn rate, the lower your chances of growing your business with minimum cost and effort. Acquiring new consumers is generally pretty expensive. As such, efforts should be made to keep the ones that you already have. Keeping hold of them is massively cheaper than finding new ones and can help you continue to grow your business via things such as word-of-mouth recommendations.
How to Reduce Customer Churn
The primary way to reduce churn is to focus on delivering an impeccable experience to each and every consumer. Customer service is a major factor in deciding if people will return to your business or try to find a similar product elsewhere if they are unsatisfied with the service they've received. It's not just bad service that can drive people away — an average experience may have the same impact. To make sure that it's not customer service that's causing your consumers to leave, staff should do their utmost to ensure that each one has a memorable experience. From initial contact right through to following up after a purchase, every step of their journey with you should be made as memorable as possible. By providing only the very best in customer service, you can ensure that you retain existing consumers while attracting new ones through your glowing reputation.
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