Killing Customer Churn: Why and How to Stop It
You lost another customer, you aren’t sure as to why, but they didn’t renew. It’s more revenue to chase, more information to uncover, and elicit a substantial effort on your end—it feels utterly defeating. To be sure, there are times when you’re glad to see customers go because they weren’t the right fit but most of the time it hits like a ton of bricks that you weren’t even expecting. That lack of knowledge and predictability makes the job of sales even harder. Customer churn doesn’t just impact sales, it impacts marketing, business development, executives, customer service, and more, cascading through the entire organization.
Why Customer Churn Occurs
The lack of visibility here is not about just numerical data, but adoption, integration, problem-solving, usability, and internal enablement. This information comes from building a relationship with the customer but speaks to the health of the customer account and their experience with your organization. However, bogged down by the lack of functionality within CRM, sales teams are more focused on administrative duties rather than selling or building those relationships. It’s not their fault that the technology doesn’t provide support—sales just wants to sell but in the rush to close, important details and nuances are lost.
This lack of visibility due to not being able to build better relationships and CRM complications becomes beyond complicated when you add multiple technologies within your organization that store information in silos. Customer service may have flagged that the customer was having issues or there were complications, but it didn’t reach the account manager who could have used it to prevent the customer from leaving. With siloed information, companies cannot see a complete high-definition customer picture, which prevents them from predicting customer churn or focusing on the customers that need additional attention.
Getting Ahead of Customer Churn
Customer churn is costly both in terms of money and time. Directly related to the customer experience, churn is costly in both money and time for organizations. Without understanding the why or having a time-aware picture of accounts, sales has no discernable way to accurately stem the outflow of customers with traditional CRM systems.
Customer acquisition costs more than customer retention. Increasing customer retention by a mere 5% can be increase profit by more than 25%, proving that it’s valuable to keep your current customers and also saves your sales team from burnout by continually increasing quotas. Here are some actionable steps that your business can use to successfully reduce customer churn.
1. Enable with Technology
The technology that you use internally impacts your sales processes, lead generation, and customer service SLAs but even though your customers don’t utilize your technology, they definitely feel the pain if it does not work. Get ahead of customer churn by providing your organization with technology that provides a complete customer picture, predictive insights, and automation that is unified across the organization, even with non-customer-facing teams.
Increased visibility is invaluable to understanding customers and their behaviors. Increased synergy and visibility in technology across the organization also provide data to be leveraged by artificial intelligence to provide predictive analytics. With increased predictive capabilities, your organization can support customers that are at risk of churning to enable and rebuild that relationship.
An important function of any technology within your organization is the ability to automate that administrative burden that prevents building relationships and focusing on actionable items. Look for automation features that provide relationship intelligence and integration with your communication technology that provide insights within it to further increase productivity.
It sounds so simple to just ask your customers but it’s not always. No one wants to have a conversation with a churned customer to find out why they left for a competitor but those are conversations that need to happen. Former customers may or may not be willing to talk to you, but what you can learn from these conversations is invaluable to helping to prevent additional customers from leaving.
Having continual conversations with your current customers should be part of account review and customer care, but if they haven’t been, it’s never too late to start. Customers can show you where processes are breaking down and they feel unsupported which will help you highlight the critical areas for improvement. Customer effort scores (CES), NPS results, surveys, and regular correspondence are great ways to continually improve and gauge customer sentiment.
3. Build a Customer Experience Strategy
Customer experience is your key differentiating factor in the market from competitors but it also turns customers into advocates. If you have been trying to optimize customer experience without a strategy, it’s time to make it a priority and part of your organizational goals. Your technology should enable the delivery of exceptional customer experiences and your organization should be aligned to a customer-centric culture, not just a singular team.
If you’re not sure where to start, look to the basics and then build from there. Every vendor, employee, and customer can help you build a customer experience strategy that works for your organization, but you have to take the next steps.
With direct impacts on revenue and morale within your organization, losing customers due to churn is preventable but it’s up to you to take the steps to create customers for life. Find the right partners to help you enable better customer experiences and talk to your customers. To learn more about how customer churn impacts your organization, view this helpful webinar and delve deeper with SugarCRM General Manager, Christian Wettre.