Every expert marketer knows that retaining an existing customer is more profitable than acquiring a new one. The additional costs behind marketing campaigns, the onboarding process, and the extra resources consumed can take a toll on a business’ budget. The same principle applies to most business transactions. Just like retaining existing employees is more cost-beneficial than hiring new ones. Moreover, every business should have a strategy to retain existing clients at all costs, even if they are expanding and acquiring new clients rapidly. Firstly, it passes across a clear message to the client that the company actually values its business. More importantly, it adds to the profit.
Customer Churn and Ways to Prevent It
Customer churn is a term for businesses losing their clients. A high churn customer rate means that a business is on its way out. Every business has to keep a close eye on its customer churn rate, especially if it’s a big corporate giant, in order to predict costs and plan a budget. It is also known as customer attrition. Customer churn rate is a piece of data. Just like any other piece of data, it can help managers make more informed decisions. The churn rate has to be actively monitored to ensure that the business stays afloat. Moreover, if there is a high churn rate, businesses can conduct interviews and surveys to identify the weak element that’s driving clients away. If used productively, customer churn rate can help a business expand at a rapid rate. Moreover, the customer churn rate determines the kind of customer retention strategy a business applies. For instance, many niche markets don’t have either high demand or supply. For companies that deal in those markets, customer retention becomes more important than customer acquisition. The potential leads are already easily identifiable and very few, to begin with. Thus, brands focus on reducing the churn rate to outmaneuver the competition. Whoever holds on to their clients the longest survives in such competitive markets. Thus, it’s safe to say that customer churn rate is a very important aspect of any business. So, to help your business stay afloat even in extraordinarily trying times, here are a few strategies to decrease it:
1: Prioritize Your Clients
It’s important to keep an eye on the numbers of your clients as well. Keep yourself informed on which client is about to be bankrupt and whose business is booming. Make your marketing decisions accordingly. Prioritize clients that are likely to do business with you again. Don’t allocate more resources than you have to clients that might be going out of business. However, if a client is considering the services of a competitor, it’s important to make efforts to retain them. Apart from the numbers, the reputation of a business is also of value in the market. It’s something that can determine whether investors get interested in that particular business or not….