5 Causes of Excessive Customer Churn and How to Handle Them 

Excessive Customer Churn. Acquiring new customers will always cost more than keeping the ones you already have. Not to mention that upselling products to your existing customer base is much easier.

That said, growing and keeping a loyal customer base is key to achieving success. This translates to reducing customer churn as much as possible.

But that’s often easier said than done. In fact, avoidable customer churn causes US businesses to lose billions each year. That’s a real problem!

Some cases may require an overhaul of the customer service experience. You’ll likely want to deliver something fast, cheap, and meets consumer expectations, so you may risk putting even more strain on your business. This is also known as a triple constraint you’ve got to overcome.

Although the average churn rate varies by industry, online retail stores can expect an average of 22% per year. Anything above that indicates that something’s wrong. So let’s look at some common causes of excessive customer churn and how to fix them.

1. Poor Customer Service and Support

A staggering 42% of consumers consider poor customer service experience a decisive factor in stopping doing business with a company, making it one of the leading causes of excessive churn rates.

Moreover, given the rise of personalization practices in customer service and digital marketing, consumers now have higher expectations than they used. That said, your customer service has to be exceptional.

The Fix

You’ve got to make sure that you understand your customers thoroughly. The more you know their needs, wants, and pain points, the better you’ll be able to appeal to them, and the happier your customers will be.

Consider creating buyer personas. Imagine who your ideal customers are and what problems they usually encounter.

For instance, Jake is a call center manager, and he’s looking for a digital customer support solution. He needs one that will allow him to communicate with customers across all digital channels and collect the data of any interactions. Jake can use customer communication software like CommBox to communicate with customers across all digital channels and deliver excellent support.

Another example can be Bill, a 45-year-old business owner with a growing team Bill is looking for an HR software solution to improve his team’s productivity. He’s not well-versed in using HR software, so he might need clear instructions and tutorials on making the most out of the platform.

 

In other words, having buyer personas will help your support team anticipate the customer’s issues, thus enabling them to fix these problems quickly.

Secondly, ask your customers for feedback. This will give you precious data on what you might need to improve and let your customers know that you genuinely care about them. You can automatically use omnichannel communication solutions like CommBox to collect feedback from multiple customers at once, no matter the channel they are talking through.

Also, aim to exceed customer expectations. Sticking with the HR software example, you could extend their subscription for free once it has expired. This will encourage customer loyalty in the future.

Lastly, consider implementing chatbots into your website. In contrast to human agents, they are available at any time of day and can instantly provide answers. Consequently, you can reduce wait times, ultimately improving the customer service experience.

You can also use chatbots to collect data from their interactions. That information could come in handy to create personalized experiences. CommBox offers smart chatbots for any use case and is a great way to deliver an exceptional customer experience.

2. Not Maintaining Strong Relationships 

Building weak relationships can also lead to an increase in customer churn.

Although the service may have been excellent when you brought a new customer to your business, a lack of continuous communication and support will likely offset the initial effect.

That said, maintaining close communication with existing customers is essential for encouraging customer loyalty and reducing churn.

The Fix 

Again, asking for feedback through emails or social media is a significant first step. Secondly, you’ve got to focus on bringing more value to your audience besides offering the product itself.

Think how-to guides or tips and tricks-type articles and newsletters, for example. They offer users helpful information on how to use the product or fix any potential issues. This will lead to your audience perceiving you less like a pushy salesman and more like a friend.

Consequently, you’ll increase the chances of earning your audience’s trust and building a loyal customer base.

Furthermore, engage with your audience regularly. The best ways to do so are via emails, social media.

On the one hand, emails feel more personal. That’s because emails enable you to create personalized campaigns that cater to various segments of your target audience.

On the other hand, social media allows for a two-way conversation. You interact with the audience via posts, while the audience responds through likes, shares, comments, etc.

This closes the gap between a business and its audience, allowing for active conversations, higher engagement, and a stronger relationship.

Another great way to engage with your audience is their preferred digital channels – 90% want to communicate with brands via the channel they choose and expect a seamless experience every time. CommBox offers a smart inbox that lets you communicate with customers across all channels like WhatsApp, Facebook Messenger, email, Telegram, Instagram, etc, all from one in one interface.

Consider going live more often. That’s because 80% prefer watching live videos over reading blog posts. That said, live videos are a great way to connect with your followers and keep them engaged.

3. Not Providing Personalized Experiences 

Most consumers expect personalized experiences. So sending them personalized messages is a good idea.

In other words, by treating your customers the same, you’ll not be able to appeal to each one’s specific needs and wants and risk losing them in the long term.

The Fix 

Data serves as the foundation of personalized customer experiences. You’ve got to gather in-depth information to help you understand the different segments within your audience.

More specifically, consider collecting behavioral, contextual, demographic, and firmographic data. To do this, integrate forms in newsletter subscriptions, free trial registrations, lead magnet downloads, checking your web analytics, etc.

You can also AI to collect data. CommBox is an AI-powered platform that collects data across all customer touchpoints, giving you a comprehensive overview of your customer experience.

4. You Attract The Wrong Audience  

Losing a high volume of customers may lead some businesses to switch their focus from keeping their existing customers to acquiring new ones. Although that’s not necessarily a bad idea, companies often target a broader audience to make up for their losses.

That’s the problem. Attracting consumers who are not genuinely interested in your products or services will lose you money and time. Even if they signed up for a subscription or bought one of your products, they will likely realize that it doesn’t offer them any value, causing higher churn rates.

The Fix 

This is also where data can come into play. You can collect data from your existing customer base to segment your audience and identify high-value customers.

You can then use that information to create lookalike audiences and attract prospects similar to those that brought you the highest value to your business. Although you’ll target a narrower audience, you’ll also reduce customer acquisition costs and churn rates.

Moreover, if you’re offering free trials, consider implementing a quiz during the sign-up process, where you’d ask users about their business’ size, the problems they aim to fix, etc.

This helps potential customers understand how your product might help them right from the get-go. Also, their answers will help you personalize their onboarding experience and create marketing materials that will resonate with them the best.

Consequently, you’ll increase the chances of turning these prospects into long-term customers.

5. You’re Behind The Competition  

Another reason why you may lose customers is that the competition simply does a better job than you. You could have a top-notch product or service, but it’s game over if your customer base decides that your competitors appeal to their needs better.

Sure, becoming the best-in-class is one way to fix this issue, but that’s no walk in the park.

The Fix 

In short, watch over your competitors, spot any weak points, and find ways to set yourself apart from them.

Check their pricing, for example. Understand how your competitors package their offers and find a way to provide a better deal.

Moreover, identify where you might have the upper hand in your competition. Perhaps your products or services are well-known for their value for money, or your business offers excellent customer support.

After recognizing your stand-out points, make sure to put them at the forefront of your marketing strategy. This will help you get on the same level as your competitors and attract prospects seeking these qualities.

Conclusion  

Overall, excessive customer churn can put a considerable strain on your business, and if not taken care of, it can lead to your business closing down.

In that case, your primary course of action should be to increase the quality of your customer support and find ways to foster a stronger relationship with your audience. You can use solutions like CommBox to provide exceptional customer experiences across all digital channels.

Moreover, understanding your audience through and through is key to lowering churn rates. That said, collect in-depth information about your customers, adjust your marketing strategy, and provide personalized experiences.

Last but not least, keep a close eye on your competitors and find ways to set yourself apart.

Contributed by Georgi Todorov, founder of ThriveMyWay, a website dedicated to teaching successful digital marketing strategies.