Customer churn rate can be one of the most worrisome statistics to manage, and one that can feel completely out of your control. While it’s impossible to avoid customer attrition altogether, there are a number of ways in which you can analyse your churn rates over time, convert these insights into actions, and begin to stifle the loss of loyal and valued customers.

Before you can even start to think about reducing churn rates, it’s essential that you have the means to identify a fundamental cause. Having a basic understanding of the various reasons a customer may have decided to buy elsewhere can help you devise a more focused approach with a higher success rate. So, what might be the reason for customer churn?

Poor Customer Service

How to monitor this: 
Often, businesses underestimate the influence that customer service has over a customer’s decision to repeat their purchase. Ultimately, an unhappy customer is very likely to seek your product elsewhere, even after just one bad experience. In order to start monitoring the effectiveness of your customer support, you need to gather customer feedback so you can then deduce where the issue lies. Perhaps your response times lack efficiency, or you need to investigate alternative couriers to mitigate damaged deliveries. Whatever the concern may be, customer feedback is one of the most productive ways of identifying it. 

How to manage this:
Once you’ve gathered your feedback, you can start to tackle the root cause. A lot of issues have a quick fix – if you’re receiving feedback that your after-sales team aren’t listening to and understanding your customers’ problems, encourage active listening and put aside some time for telephone training. But if lots of issues relate to damaged goods on delivery, for example, you may need to research alternatives, trial these options, and track progress through a basic problem tracking/ticketing system.  

Your Customers Aren’t Succeeding

How to monitor this:
The success of your customers has a direct impact on that of your own business because, as their business grows, they’ll become more confident in the products you supply to them. So, you should be tracking the progress of your customers – things like their average order value and order frequency are just a couple of good indicators.

How to manage this:
To ensure your customers are successful, you should engage regularly with them, particularly those who haven’t been contacted in a while or those you’re missing orders from. Tools like RFM Analysis can help segment your customers by their spend pattern.

Competition

How to monitor this:
Sometimes you’ll find that your customers find better deals with your competition and transfer their loyalty to them. This could be due to better pricing or value for money, so it’s crucial that you monitor the activities of your competitors. 

How to manage this:
Investing in product development and using customer feedback to identify what needs improvement will enable you to tailor your products to the needs of your valued customers. Not only will this enhance your products compared to the competition, but it’ll improve your relationship with customers due to active engagement. Building this kind of rapport can be the make or break when it comes to customer churn.

Managing all of this manually can be a complex pursuit, and analysing this level of data rigorously and consistently might need the help of software that has built-in automation. Investing in an effective CRM system that focuses on both getting more customers and maximising customer lifetime value (CLTV) means you can track progress in the areas you’re trying to improve, and see the direct impact this is having on your churn rates. CRM with integrated RFM Analysis allows you to anticipate which customers are on the verge of leaving, and action these insights before that customer is lost for good. An integrated CRM can also help with managing customer interactions by focusing the data in one location so anyone can pick up a task where it was left off, making your customer service more effective and efficient.

Prospect CRM is designed for product businesses selling B2B, and has built-in features to maximise customer lifetime value and prevent customer churn. Try Prospect CRM for free with our 14-day trial today.