It isn’t very pleasant to see customers stop using or unsubscribing from your service. It’s a part of doing business that some customers will stop using your service for any reason.
A churn or attrition rate that is higher than average can indicate that your business may be having problems. A high churn rate or attrition can cause a company to suffer and revenue to decrease.
The average churn rate depends on the industry.
Customer retention is important.
Customer retention is crucial for any growing business. Five times more can be spent to acquire a new customer than it is to retain an existing one.
You must identify the people who are your ideal customers and then launch a campaign to convince them to buy your product or try your service. All of that takes time and costs money.
Imagine you are running a pay-per-click marketing campaign. You must design the ad and define the targeting. Then, you have to set aside the budget for the campaign. You have to create a Landing Page when a user clicks the ad. After they’ve signed up for your email list (which you must pay for), you can send them links that lead to blog posts, which are written by someone else. You’ll be lucky if you get one person out of 100 to buy your product or use your service.
Each step in the process of acquiring a customer is an investment. You can avoid most of the process if your clients have already tried your service or product. They will trust you if you deliver a quality product. It’s then easier to sell that person to again.
Small Business Trends states that lowering your churn by 5% can boost profits anywhere between 25% and 95%. Focusing on customer retention will help you increase profits.
You can use the following five-step strategy to win back customers by using targeted content.
Let data be your guide.
Knowing your customers will help you win back lost clients. Know your customers and their preferences.
The information you collect about your customers can help you determine which customers you should pursue and what strategy will produce the best results.
Segment your customers. The recency, frequency, and monetary (RFM) models are tried and tested methods.
You give each client an RFM score between 1 and 5 when you conduct an RFM Analysis. Scores of 5 are considered high, while scores of 1, 2, or 3 indicate that work needs to be done. Your best customers have a score between 5-5-5. Look at the table below as an example.
An RFM analysis will allow you to keep track of your customers’ actions. You can group customers and look for trends in their purchasing habits.
Why did the customer leave?
Poor customer service, price concerns, and the better alternatives provided by competitors are all reasons why customers leave your services.
You can combine surveys with other customer feedback strategies. Surveys can be combined with other strategies for customer feedback. You will likely gain more insights from exit interviews than you would through a survey. Interviews are time-consuming and difficult to conduct, so it is important to find the balance that works for your company.
Response rates for all types of feedback from customers will be low. Consider using incentives to improve response rates.
This graphic shows the reasons why customers leave your business and what you can do to win them back.
You will learn about their problems as you gather responses from them. This data will be useful when you plan your strategy for reducing churn and increasing customer retention.
Develop a customer retention strategy.
You have completed your research. You have analyzed your customer data and divided them into groups according to their engagement and spending patterns. This analysis has given you valuable insight into the customer journey. You’ve also identified issues that your customers have had with your business.
Next, you need to develop marketing strategies that accomplish two things.
- Predict the customer journey so that you can offer people products or services when they’re most likely to purchase something based on their buying habits.
- Develop a strategy for regaining lost customers using the information you have gathered about them.
I’ll give you an example.
If you are an SEO agency, and you know that 76% of your clients will increase their budgets between months 9-12, you can create a project proposal to anticipate this need. You can start by discussing their marketing goals and then share projections on the impact a larger budget will have on their business.
You can develop a strategy to win back customers by anticipating their journey. If you’ve identified that customers are concerned about a 12-month fixed project because they cannot guarantee their cash flow for such a period, then you can create a strategy to win them back. You could offer to work with an agency for six months and then cancel the contract with no risk if you give a 30-day advance notice.
Remember your customers and remind them of their missing goods
You can use content targeted to win back your customers and effectively.
Marketers love it because it uses the fear of losing out to increase engagement and sales. FOMO is based on the desire of customers not to let an opportunity slip by.
Content with FOMO is frequently used to encourage cart abandonment. It’s also effective when used as part of a promotional campaign.
This email is very effective.
- This reminds the customer of what they have forgotten.
- It uses excellent visuals for the message, which helps establish brand identity.
- The “Discover What’s New tab” is a call to action.
You should include all of these points in your message to clients. You can tailor it even to the buyer persona.
Offer retention incentives
Give them incentives to return. These incentives can be in the form of discounts, freebies, or giveaways.
The offer should include specifics about the benefits the customer will receive, and it should use lots of images to make the outreach appealing. They should also make the customer feel important and wanted and have a clear CTA.
You can use the data you collect from RFM to determine which incentives and offers your customers are most likely to find appealing.
According to Harvard Business Review, the results of a 2016 test by a telecom firm on 40,000 customers were mixed. Some offers worked better than others. According to Harvard Business Review, the results were:
- Discount ($20 for six months): 45% Success Rate and 668% Return
- Upgrade ($35 Movie Channel Free for Three Months): 41% Success Rate and 793% ROI
- Bundled (a $20 discount for six months plus a $35 free movie channel for three months): 47% Success Rate and 302% ROI
- Tailored (customers that left due to the price received a discount, and those that left because of the service received an upgrade): 56% ROI and 45% success rate
With the right proposal management software, you can easily close more deals.