4 Ways to Stop the Churn

Now don’t grab the Rolaids.  I am writing about Customer Churn.   But here is a statistic that might require something to calm your stomach.  Did you know that 68% customers leave you because they feel poorly treated, according to TARP? Ouch!  Customer churn due to neglect is costing us money.  Some of it is avoidable and we can change it. 

So many business owners spend quite a bit of money to attract new customers.  But if too many of your customers are leaving on the backend, what good was the money that you spent attracting them?  It’s time to stop (or at minimum reduce) the churn.  Here’s how:

 1)  Look who’s churning. 

Make a list of your top 20-40 customers by spend for the prior year.  Then, make a list of your top 20-40 customers based on their spend for this year.  Compare these lists.  Have there been any changes in the list of names?  Who has left you?  Do you know why? 

2)  Find out how much it’s costing you. 

Compare the current spending amounts of your customers to the prior year.  If you are seeing a general decline, it is understandable considering the economy.  If you see significant differences in spending amounts for a customer, it could mean that they are buying some of their products and services elsewhere. 

 3)  Find out why they left you.

Getting feedback from your customers is one of the best ways to find out why they left you.  Research company Polaris found that the most successful methods for reaching out to lost customers is to conduct phone interviews with them.   Here are a couple of questions you want to ask:

• What changed for you?
• What do you feel our competitor does better than us?
• What would it take to get you back?

 4)  Implement changes based on the feedback.

Look at this feedback as a gift.  Use it to improve your systems, products, services and customer engagement.  Here’s the good news.  According to Jill Griffin of the Griffin Group, sales statistics show that on average a company has a 20-40% sales profitability of successfully selling to lost customers.  Compare that to the fact that on average, a company has a 5-20% probability of selling to a NEW customer. 

Can we stop all churn? No, some is involuntary and some is necessary.  But if you are losing the best of your customers, take action now to stop the churn.

Norma is an innovative Customer Experience Strategist, Business Coach, Blogger and Speaker and owner of Captivated Customers. Her goal is to inspire business owners to captivate their customers and turn them into raving fans so that their businesses can experience increased profits and more fun.  You can contact Norma at norma@captivatedcustomers.com or call her at(480) 694-6940.

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