Sunday, July 15, 2018

Customer Churn, what you need to know

This is a sponsored conversation written by Wrapped Up N U on behalf of Diamond Links.

photo from FirmBee on pixbay


You may be asking yourself what exactly is customer churn and how does it pertain to my company? It can also be known as customer turnover and it represents the number of customers who have unsubscribed from your product or service in a given time period. As a blogger, I see first hand the influence my opinion has in the marketplace via my readers and the interaction I have with them daily. According to wikipedia there is basically 2 types of customer churn that affect a business.
  • Voluntary churn occurs due to a decision by the customer to switch to another company or service provider.
  • Involuntary churn occurs due to circumstances such as a customer's relocation to a long-term care facility, death, or the relocation to a distant location.
In most applications, involuntary reasons for churn are excluded from the analytical models. Analysts tend to concentrate on voluntary churn, because it typically occurs due to factors of the company-customer relationship which companies control, such as how billing interactions are handled or how after-sales help is provided. Every business needs to attract new customers, but the value of retention is not to be underestimated. Having a loyal customer base that will offer word of mouth to a potential new fan base is also a great thing too. Understanding the wants and needs of the people you are marketing too and their ability to help you acquire new customers in today's influencer driven society.
  • According to Bain and Company, a 5% increase in customer retention can increase a company’s profitability by 75%.
  • Gartner Group statistics tell us that 80% of your company’s future revenue will come from just 20% of your existing customers.
  • According to Marketing Metrics it’s far easier to (about 50% easier) sell to existing customers than to brand new prospects.
photo from FirmBee on pixbay

Reducing churn is incredibly important to all companies to retain their current customer base and to also attract potential customers. Understanding what it takes to keep your valued customers is the number one objective of any and all profitable businesses. It's the biggest factor in increasing revenue, a higher referral rate and increasing upsell. Even companies with the most recognized names in the industry employ teams dedicated to churn reduction for customer retention and growth. Make sure your customer success team is proactive about addressing -- and solving problems.

A recent article from HubSpot covers the 5 Reasons for Customer Churn Your Company Needs to Address. This includes but is not limited to the 5 items below:
  1. Lack of (or Zero) Engagement
  2. Poor Product-Market Fit
  3. Product Bugginess
  4. Difficult User Experience
  5. Lack of Proactive Support
How have you reduced churn at your own company? For more information on customer churn, I highly recommend checking out this article from UserIQ - Customer Churn – Mastering A Key SaaS Metric.

 As always keep it southern Y'all!

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