Churn rate: our 5 tips for improving it
Churn rate, or attrition rate, is a key indicator for many companies. It is the volume of customers a company has lost over a given period. It is an essential indicator of customer satisfaction, customer loyalty, performance and profitability. In this article, we present our tips for improving your churn rate.
The churn rate is an important indicator for companies offering subscription-based services (telecommunications, energy, banking, insurance, etc.). It represents the proportion of customers lost over a given period. This KPI reflects the level of customer satisfaction and loyalty to a brand, and enables performance and profitability to be measured.
"Great customer service is the key to success in a competitive global economy, whatever your business" - Richard Branson, owner of Virgin.
There are countless examples of companies that stand out in the market thanks to their high-quality customer service. Take Starbucks, for example. If anyone can sell coffee, who can boast the same level of service as Starbucks?
Companies generally focus on acquiring new customers, allocating a significant proportion of their resources to this. Acquiring new customers is obviously essential, but not at the expense of existing ones.
Imagine yourself in your favorite boutique where you buy products on a regular basis: the sales clerks are busy with new customers and they're completely abandoning you. This will inevitably lead to a feeling of disappointment and dissatisfaction with the store.
According to a study published in the Harvard Business Review, 23% of satisfied customers share their experience with at least 10 people.
As you can see, there's no shortage of reasons to take an interest in the churn rate, and there are many ways to improve it, as illustrated by the examples of Virgin and Starbucks.
Here are 5 essential tips to reduce attrition, keep your customers happy and turn them into loyal customers.
1. Attention to detail
"Become an expert listener and observer, and you'll gain much more than by talking" - Robert Baden-Powell.
Customers turn to you with the hope that you can solve their problems. The cornerstone of your company's strategy should be to listen carefully to your customers through a variety of channels, primarily social media platforms. A simple tweet, a mention on Facebook or a brief e-mail can have a huge impact on customer engagement.
Using state-of-the-art tools, marketers should strive to dive deep into their customers' problems and offer them the optimum solution. Going the extra mile to ensure the best possible customer experience is the most effective way to generate conversions while building lasting relationships with customers.
To ensure the success of your business and improve your conversion rate, it's essential that your staff establish a strong bond of trust with potential customers by taking their problems to heart. This brings us to the next point: recruiting competent, dedicated people.
2. Hire the right people
To find fulfilled, committed and satisfied employees, it's essential to conduct a selective recruitment process. The first step is to ensure that potential candidates have an overall positive outlook on life. Virgin Airlines, for example, is known for selecting only 1 in 100 applicants.
A fulfilled employee is intrinsically motivated to take care of customers and prospects. However, it's not enough simply to recruit the right person; it's just as important to train them in a corporate culture rooted in positive values. Every organization should have a set of core values to pass on to its employees. Here are Batvoice's values:
- " I believe in myself and I'm committed to doing everything I can to help our customers."
- "Wherever I go, I exert a positive influence on those around me. I strive to contribute to making this world a better place."
The adoption of such values within the company will foster a positive mindset among teams, which in turn will encourage them to offer exceptional customer service.
3. Ask for customer feedback
Soliciting customer opinions and asking them to rate a service remains a recommended practice. In general, customers are often willing to participate in satisfaction surveys.
Satisfaction questionnaires essentially provide raw data for measuring company performance, while also gathering valuable information on customer perceptions of service.
It's also preferable for the CEO to maintain close personal links with customers and employees alike. A simple way to start is to interact directly with them via social networks, without delegating this task to someone else.
For example, if the CEO solicits customers' opinions on the company's services via a tweet, this action will elicit a positive reaction from them towards the company. It's important to note that a customer's opinion has the same value as that of an ambassador or partner of your company; so letting customers talk about your services generally produces beneficial effects, just as in storytelling.
4. Develop a long-term relationship
Once a customer has purchased a product or service, we often wonder what more we can offer to maintain the relationship over time and avoid churn. In reality, this is where it all comes down. Building a lasting relationship with customers, rather than a short, intense and ephemeral one, should be a priority for companies.
Take car dealers, for example. How many of them make the effort to stay in touch with the customer after the sale? Very few, in fact, whereas during the sales process they make themselves extremely available and welcoming. This will inevitably lead to a loss of customers, because the customer won't feel valued, so he won't have any interest in staying.
To develop a long-term relationship, it's essential to provide post-purchase value to your customers. Show that you're there, even to satisfied customers: you can produce content (storytelling, testimonials, articles, videos, tutorials, etc.), check up on the customer by contacting him or her, and so on. It's also a way of standing out from the competition. In this way, you'll show that they're seen as the central link in your business, and this will serve to build customer loyalty.
Companies are only successful if they take a genuine interest in their customers. Loyalty is more important than acquisition: it costs less and improves profits.
"A good retention rate can improve revenues by up to 95%". Bain & Company
Whereas acquiring a new customer can cost up to 7 times more than keeping an existing one.
5. Listen (carefully) to the customer's voice
It's the key to success for any company. By listening carefully to the Voice of the Customer, we gain an in-depth understanding of their needs, habits, desires and expectations. This enables us to design an offer perfectly adapted to the market, anticipate industry evolutions, and cultivate lasting relationships with our customers. Listening to the Voice of the Customer encompasses several channels and media, which we can distinguish as follows:
- The Voice of the Customer, through questionnaires, forms, satisfaction surveys, etc.
- The unsolicited Voice of the Customer that emerges spontaneously through social media, customer service, chatbots, and instant messaging, among others.
- The Voice of the Customer, which remains silent, but can be discovered through market research and analysis, for example.
If you'd like to find out more about Voice of the Customer analysis, we invite you to explore how Batvoice AI can help you build loyalty and satisfy your customers and prospects by leveraging cutting-edge technologies for customer relations and customer experience. To find out more, visit here.