Welcome to part two of this series on reducing churn rate. Let’s jump right into a few methods for keeping customer retention high and making sure no one is jumping ship!
Savvy businessmen and women know that keeping an eye on the competition is key, and nowhere is this more important than in customer acquisition and churn rate assessments. Take time out of every day, week, or month – depending on the cycle time and speed of your market – to research what your competitors have been up to. Are they doing something that you aren’t? If so, is it something that you, as a customer, would want and benefit from? Be honest here. If the answer is “yes,” think about how you could not only implement something similar, but how you could improve on it.
This is simply part of the process of continuously adding value to a business, and keeping an eye on competition helps you to gauge the rate at which you should be doing so. Rather than trying to slowly dole out new goodies to your customers, challenge yourself to give away new value as it comes about in real time. This also means that you won’t be able to rest on your laurels, and will have to constantly innovate in order to have bigger and better offers for your customers. Seem like tough work? It is – and it’s also how industry leaders get to the top.
Get Personal, Don’t Automate
Automation is one of the trickiest things to master when your business begins to grow. You want to be able to manage everything at once, but losing the personal touch you may have begun with can be detrimental to your relationship with leads and customers.
As a rule of thumb, it’s ok to automate, but don’t fake it. This means that things like post-purchase emails, etc. can be automated, and are expected to be. By the same token, don’t fake communications so that they are automated but are actually canned, pre-written, and going out to 5,000 people.
For example, let’s say you write an email for your list to announce a new offer. Don’t use silly name tagging to fake personalization. People see straight through that, and it is (rightfully) perceived as phony. People understand that they are part of a mailing list, so don’t try to convince them otherwise.
If they write to you, however, respond personally. If that becomes logistically impossible, then make it clear that a support team is the one helping to field questions and concerns. Also, keep in mind that “impossible” should mean something different to you as an entrepreneur. You should be a time management ninja, and also realize that your work day might be 10 12, or 16 hours, not eight.
Ride the Wave, Don’t Chase It
Even more important than watching the competition is to keep your finger on the pulse of your industry and the context within which it exists. Recently, Facebook noticed (and has helped champion) the bringing of rudimentary mobile internet to new countries that have never had such services. The company launched a stripped-down, Facebook Lite app to better accommodate these low-bandwidth markets. As soon as new mobile plans hit these countries, Facebook will be one of the first apps available.
Be the Facebook of your industry. Sound like big shoes to fill? They are! But the point is that you should be looking to ride along with new trends as they crest, and leave everyone else to chase after you. That is, of course, the mark of an industry leader after all, isn’t it?
Heard of churn rate? If not, well, yikes! Churn rate, in a nutshell, is the rate at which your big business water bottle is leaking out customers – to put it visually. Businesses with high churn rates are at risk of spinning their wheels or even losing money. For example, a business with a churn rate that is equal to its rate of growth will not only have no net growth, but could also be losing money if it’s paying into an advertising and marketing budget to acquire that customers that help its numbers stay “even.”
Further complicating the situation is the fact that churn rate can actually be measured in a number of different ways. It can be
– The percentage of customers lost over a certain time
– The number of customers lost over a certain time
– The dollar value of recurring business lost
The bottom, line, however, is that a high churn rate is universally an indicator of the need for some patchwork in your business. This two part series is going to explore several ways in which you can actively combat your churn rate. More specifically, we’ll explore strategies for preempting churn – it is almost universally easier to retain customers than to reacquire them after they are already lost (intuitively, this makes sense).
Step Onto the Scene with a Bang!
One of the first steps to churn rate is to nail the first impression. When someone signs up for your mailing list or subscribes to your services, you want them to be excited about being part of your ‘family’. What you don’t want is for them to just barely be pushed over the decision threshold, ready to back out at the first sign of doubt.
For most online marketers, this means having professional, slick interface, website, and user experience design from the beginning. Just as a job interview is your first chance to make an impression on a potential employer, your website is a first point of contact for impressing new leads. It also means putting forth a killer offer from the beginning that jumps out as a must-have. By extension, this means getting your targeting perfect from the beginning. Landing pages need to be optimized for the search terms and/or channels people use to reach them. Split test the heck out of your pages, and put in the work to make different landing spots for different pathways of entry.
Follow-up On Promises!
Admittedly, anyone can make a good initial impression by writing up a great offer, but your immediate turn rate will largely be determined by how well leads feel their expectations are being delivered on. If you promise a solution, don’t fall into the trap that so many internet marketers fall victim to by only giving away half solutions.
Let’s say you run a product on how to lose weight. Your mailing list opt-in form promises a guide on how to lose your first 10 pounds. Some marketers would send a guide out with the first two steps of a four step method to dropping weight. But not you! No! You’re going to give a complete method that will really start to change scale readouts. Your email series is actually going to be useful (what a concept!).
You’ll be building trust, and, though it’s counterintuitive, customers will be more likely to make a purchase of a weight loss system from you after you’ve already given them something that produces results. What you’re selling can help them build on the progress they’ve already seen. Obviously, this can apply to any niche!
Alright, that’s it for the time being – see you all in part two.