Putting the breaks on a declining customer base is a task best done in advance. But if you find yourself in the middle of a customer crisis or purchase cycle, taking the proper steps to stop customer churn can save your company hundreds of thousands of dollars in lost revenue and additional marketing dollars.
The following approaches are not tactics that we suggest as general approaches to growing the right customer base. For good insight into creating a winning retention program and positioning to help grow loyal customers, check out our posts on Retention Campaigns, 3 Must Haves of Customer Retention, and Three Steps to Improving Your Customer Retention. These items below can “stop the bleeding” of customer churn while you evaluate your overall strategy.
Mine Your Customer Data, Look For The Pattern
The #1 thing you have to know in any customer retention program is the fault points, or why the customer leaves. A behavioral or product based cycle should be apparent if you are digging deep enough. If you have a customer churn model setup, you already have a head start. If you don’t, you have to have some idea of why your customers are churning before you can stop it. A loose hypothesis is better than none, so start with what you know. It’s best to engage with only the customers you need to engage with in these tactics. These are expensive tactics and they will engage the customer for one or two more cycles. You will need to find the real reason they are leaving and address that as soon as possible to have long terms impacts on retention.
1. Engage in Offers
This tactic has to be done with exacting standards. We are not advocates of discounting products, but understand there is a time and place for everything. If you need more time to figure out what the issue might be for your product or service, extend that service at a lower, or no cost to your customer. You might even be in the position to acknowledge the issue and put a promise into play along with the offer.
2. Put Promises in Play
This is one of the hardest tactics to execute well. If you honestly address the issue which is causing the churn, you can let your customer know what you are doing to address this problem. If it is a feature that is lacking, new competitive products, or poor quality of the product, you have a starting point. With this approach, you are not hiding behind the wall of a “perfect” product. Engage in a dialog about what you are doing to address the problem directly. You’ll address the issue before the customer has to act on it themselves, or at least delay them.
3. Involve The Customer
The best way to curb a sliding customer sentiment is to give them an outlet. A customer survey that is designed to gain more information around your hypothesis can lead you to real change and retention. You might even be able to incentivize the issue by giving them a free month of service, or dramatic discount to complete the survey to accomplish two of these tactics at the same time. But make sure you follow a survey program if you send one so you don’t further alienate your customer in the conversation.
Remember, these tactics will only buy time while you step back and really address your churn issues. There is no silver bullet to stopping a customer from leaving your company, there are only tactics to extend the process in emergencies. A proper diagnosis and addressing the problem can lead you to a stronger customer base and lower churn.