O churn is a metric used by companies to calculate the cancellation fee or how much revenue has been lost by losing customers.
To calculate the churn rate that a company obtained in a given month, just divide the number of cancellations by the number of customers before the cancellations. Therefore, if a company had 100 customers and 4 canceled, the churn rate is 4%.
In this blog post, we will give you 10 tips on how to reduce the churn or the cancellation fee at your company.
10 tips to reduce churn in your company
1 - Understand why customers cancel
The most effective measure to lower your churn rates is to understand why your customers cancel.
In conjunction with your service team, map the most recurring reasons for cancellation. That way, you will have the material you need to create a contingency plan. In addition, you will be better prepared to deal with different dropout scenarios, making it possible to even reverse a churn.
2 - Align expectations
Naturally, a customer who arrives at your company in disagreement with the services that will be offered has a high chance of canceling.
The expectations alignment process begins the moment your marketing team captures the lead; there is little point in winning over the customer with promises that cannot be kept. Therefore, to avoid dissatisfaction, make it clear and transparent which services will be provided.
3 - Identify possible dropouts
An efficient alternative to reducing the number of cancellations is to identify them before they happen.
Through a mapping of your customers' activities, you can identify those who use your services least. With this information you can work on a possible solution to the problem that the customer has been facing. In addition, it is essential that you follow the data of your support team. Analyze everything, complaints on social networks and NPS indexes, always looking for non-conformities, adversities and dissatisfactions.
4 - Have a good Customer Success team
A good shopping experience is inextricably linked to the quality of your Customer Success team.
The Customer Success team is responsible for the customer's journey within the company, being the first and most capable area to be activated in the event of a cancellation. Therefore, training your employees in this sector efficiently is a great investment that will certainly bring good returns.
Currently on the market there are several solutions that can help your business in this process, as is the case with tools GainSight e Evergage. However, if it is not within your company's budget to invest in one of these softwares, it is possible to plan well with several free tools, such as spreadsheets and documents.
5 - Deliver the best experience possible
Despite playing an extremely important role, the research team Customer Success it is not solely responsible for the positive customer experience. A company that has a culture of always putting the consumer first, certainly gets fewer cancellations.
Since in the age of digital technologies, customers have a more immediate and rigorous profile, it is essential to invest in efficient customer service. Make sure you always listen to what he has to say, so that, in addition to identifying possible cancellations, you stay on top of what may be causing problems, which can be optimized and from there, improve the delivery of your product.
6 - Create loyalty plans
Creating loyalty plans can be a great way to keep customers interested. This plan can be made from the sale or exchange of products between companies or even with partnerships with businesses that have a target audience similar to yours.
The way in which this plan can be structured will depend a lot on the context in which your company is inserted, but, without a doubt, it is a great tool to increase the "life span" of customers.
7 - Offer innovation
Depending on the situation, the services offered by your company may be outdated or have several competitors. Thus, the chance of a customer canceling looking for a solution with more functionality is very large.
Therefore, it is interesting that your company is always modernizing, following market trends and, mainly, investing in innovation to offer a differentiated service.
8 - Monitor defaults
A sign that the customer is about to cancel is default. In conjunction with your finance team, map which customers are in debt and, if possible, set up a plan to help them with debt recovery and stay at home.
9 - Add value to your product
Even after the sale is closed, it is important to show the value of your product to the customer. Through constant behavior and quality content on social networks, your customer will remain engaged and will see value in your brand.
In addition, investing in a blog can be an interesting alternative. In addition to generating value, a blog can educate its consumer. That way, he will not only be engaged, but also informed and will be more likely to upgrade services within the company, for example.
10 - Let the customer go
Despite all the tips to prevent your customer from canceling, in some situations it is preferable for them to cancel. Among the situations we can mention, not being prepared for the services and experience offered. Keeping that customer in the house is synonymous with disagreements.
Remember: a dissatisfied customer will give negative feedback about your brand to other people. He will certainly make complaints and can tarnish your company's reputation. So, evaluate which customers are really worth investing efforts to keep in the house.
I hope this article has helped you!
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