WHY YOUR BUSINESS IS AT HIGH RISK TO EXPERIENCE CUSTOMER CHURN & HOW TO PREVENT IT.
We all get nightmares once in a while and it can be so scary until you wake up and discover it was just a dream. As for entrepreneurs, the nightmares they have are more real than most people would like to admit. If you are not worried about low sales that year or month is more on how are employees behaving, are they getting the job done well, is your market outreach and brand awareness growing.
One of the biggest nightmares for business owners/entrepreneurs is customer churn.
The accurate definition of Customer churn, also called customer attrition or fall out, is the number of paying customers who fail to become repeat customers or those who may have been loyal customers but cease to use your products and all association with them and the company. This is bad for any company as they rely on existing customers for referrals and that is a positive way to boost sales. Also it cost more than 7x more in expense and time to attract and convince a new client o purchase something, compared to an already existing and customer during upselling or cross selling.
Below are 8 reasons why your customers are leaving your products or there is a high customer churn on your end.
- NOT CARING ABOUT YOUR CUSTOMERS’ NEEDS
Sales are important for the growth of any business of course that is very true, however is your company customer-centric? The truth is your customers are the sole reason your business exists and brings you profits. As a business, try as much as possible to show you customers how much you care and that their feedback is important and can be implemented. Unfortunately, lots of businesses and business owners seem to have forgotten that. If you’re focused on only your own needs and don’t put your customers at the core of your business, you’re most likely to be playing a losing game and will definitely loss an opportunity for referrals, up selling and cross-selling to your existing customers.
- YOUR CUSTOMER SERVICE QUALITY IS LESS THAN SATISFACTORY
“Customer is always right!” This is a term many of us have grown hearing but few actually understand the weight it holds especially in customer service. The number of consumers switching companies due to poor customer service experiences is growing year by year. Which means that whether you like it or not, customer service is more important than ever today.The quality of your customer service determines how successful your business is. Getting your customer service above satisfactory is key and should be a priority, and rethink your customer service strategy and define its weak points.
III. LACK OF A STRONG CUSTOMER SERVICE TEAM
In all honesty, Customer Service is not for everyone as well have different personalities and it is hard. That’s why it should be done by the right people who not only perfectly know your products/ services, but who are also great communicators and problem solvers, who are trained to 
effectively handle difficult situations and equipped with the necessary tools. The key is paying a little more attention to hiring, motivating, training and managing your customer service team. In the end, happy employees mean happy customers may sound cliché’ but it has never been more accurate in this day and age.
- NON EXISTING PROVISION OF MULTI-CHANNEL SUPPORT
Which customer service channels do you use for customer support? While phone and email still remain the most frequently used channels for consumers to contact companies, they expect to be able to get in touch with a brand through a number of different customer service channels such as online forms, Live Chat support, SMS and social media networks. Not offering these options is likely to frustrate a significant proportion of your customer base.
- BROKEN PROMISES AND HIGH DISAPPOINTMENTS
There’s nothing more disappointing for your customers when your company fails to deliver on the promise. And that’s probably one of the worst mistakes you might be making as a business. Whether it’s the quality of your products/services, return policy, delivery times or anything else, you do make promises to your customers. By making them, you ask your customers to trust you. And if you break that trust, you run the risk of losing them once and for good.
- FAILURE TO LEARN FROM NEGATIVE CUSTOMER FEEDBACK
As Bill Gates’s famous saying goes: “Your most unhappy customers are your greatest source of learning.” If you approach negative feedback with the level head and the right attitude, you’ll see a great value in it for your business. Your customers are your best critics and when they’re not happy with your products, services or customer experience with your brand, they simply show you where you need improvements. So why not use it to your advantage?
VII. YOU HAVEN’T GIVEN THEM A REASON TO RETURN
How do you treat your loyal customers? Once earned, customer loyalty needs to be maintained and properly rewarded. Show that you really appreciate them being your long-term customers and that they are important to you. Adding a little extra WOW factor can be really huge for your business. The options are nearly endless here, from special offers and discounts to a series of exclusive perks. As a bonus, you might find yourself attracting new customers who see how you treat and appreciate loyalty.
VIII. Lack of Innovation as a Major Reason Customers Leave
Lack of innovation has resulted in the death of many young and mature businesses. When all you end up offering your visitors is “same old, same old”, you risk scaring them away. Innovation isn’t something you can set and forget. It requires close attention and constant maintenance and attention.
The very nature of retail today makes innovation a necessary aspect of helping you with retaining customers and making it convenient for them to access your products.
Importance of Predicting Customer Churn
The ability to be able to predict that a certain customer is at a very high risk of churning, while there is still some time to do something significant about it, itself represents a great additional potential revenue source for any business.
- It’s a fact acquiring new customers is a costly affair but losing the existing customers will cost even more for the business or the organization. As existing paying customers are usually returning customers who if happy will purchase repeatedly from your brand.
- The competition in any market is on a rise and this encourages organizations to focus not only on new business but also on retaining existing customers.
- The most essential step towards predicting customer churn is to start awarding existing customers for constant purchases and support.
- An entire customer journey leads to customer churn and not just a few incidents. Due to the priority of avoiding customer churn, organizations should start offering incentives on purchases of these soon-to-churn customers.
- As mentioned earlier, a customer’s intention to stop using a particular product/service may always be a decision formed over time. There are various factors which lead to this decision and its important for organizations to understand each and every factor so that customers can be convinced to stay and keep making purchases. This can be done by constantly conducting customer satisfactory surveys and analyze the received feedback.
by Waithera Mwangi.
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