Do you have a hard time keeping customers interested after their initial purchase? If so, you may need help getting a handle on your churn rate.
Do you have tons of customers signing up for your product every month, but you're still not seeing long-term growth? If so, you may be experiencing an abnormally high customer churn rate.
Essentially, your customer churn rate represents the percentage of people who stop interacting with your business before the end of their predicted consumer-brand life cycle.
Some businesses naturally have a short consumer-brand life cycle – such as online learning management systems, because once a consumer finishes their course, there's little left for them to do on the website. Alternatively, SaaS businesses have much longer cycles, because the customers need the product or service to improve their company or blog.
You can calculate your churn rate by dividing customers who stopped engaging or unsubscribed in a specific timeframe by your total number of customers. Once you've divided that number, multiply by 100 to get your churn percentage.
Let's say you have 1,000 customers, and 50 left during the month of June. After dividing the two numbers and multiplying by 100, you've calculated your churn rate at 5%.
Let's take a look at several tips you can use to get a better grasp on your churn rate.
1. Learn more about your audience.
The first thing you should do to lower your churn rate dramatically is to spend some time learning about your target audience. When a customer unsubscribes or decides not to shop with you anymore, the main reason is that your product or service didn't resonate with their goals or pain points.
Take some time to learn about your audience on social media, through your Google Analytics, and by using on-site tools like feedback forms. You should start to identify patterns in the types of behaviors, goals and interests that most of your existing customers have in common.
This information is perfect for building customer personas. Customer persona sheets are a marketing tool business owners use to identify their customers and create content that resonates with their needs. You'll want to include their buying habits, personality traits and demographics for a practical persona sheet.
Once you have this information in hand, you can start creating content and offers that keep existing customers engaged with your brand. At the same time, you'll bring in more prospects who are genuinely interested in the product or service you offer.
2. Create value-centric content.
Now that you know what your customers want to see and experience, you can start creating value-centric content. Blogs are a great way to get more eyes on your site and keep people invested long after their initial purchase. Instead of buying your product and forgetting about your site, they will keep coming back to read your latest post.
Did you know that 68% of consumers say they like reading content from brands they're interested in? If you're willing to publish high-quality blog posts, lead magnets and videos, you will see more people engaging with your site and coming back for repeat purchases.
All of the data shows that websites that feature blogs tend to see more traffic. Specifically, brands that publish 16 pieces of content per month tend to see 3.5 times more traffic than businesses that publish four or fewer posts. Producing tons of great content will help you forge a stronger bond with your audience, and it can improve your SEO score.
If you want to reduce your churn rate, you have to give people a reason to go to your website again. High-quality blog posts will catch the attention of people who are passionate about your industry. If they see their passion reflected in your writing, there's a much higher chance that they will stick around, which can help you get control of your churn.
3. Take customer support to the next level.
Believe it or not, a massive percentage of your customers are likely to leave and never come back if they have a poor experience with your customer support team. A poor experience could be anything from long wait times to an inexperienced agent.
There are plenty of ways you can improve your customer support. The first thing we suggest is holding a training class for your support members so they can quickly and efficiently help customers who contact your business. If you deliver fast results that work, customers will feel comfortable reaching out to your team in the future.
You can boost the speed and effectiveness of your customer service by adding chatbots to your website. Chatbots are AI-powered programs that can have conversations with customers in real time. One of the best things about chatbots is you can use them to contact consumers who land on your site preemptively.
For example, imagine someone lands on your homepage because they want to renew their subscription, but they forgot their password. A chatbot can intercept the customer the moment they land and help them through their issue. The result is a happy customer who will proceed to renew their purchase, which cuts down your churn rate.
4. Gamify your brand.
Brands from virtually every industry use gamification to some degree to keep customers engaged. One common example can be found on the Starbucks app: Users who get their phone scanned at the point of sale accrue points they can later use for a free drink. This encourages them to come back and make multiple purchases, reducing the chance that they will abandon your brand. You can use a similar points-based system on your website to reward your loyal customers and encourage new consumers to come back for more.
If you'd rather not implement this strategy, you can gamify virtually all marketing channels. Social media is a particularly useful place to use this technique, because 94% of people plan on buying something from a brand they follow on social media.
You can create a simple caption contest, share interactive content, or create games that will encourage people to check in and continue using your brand. The most important aspect of gamifiying your brand is fun. Are consumers going to have a good time engaging with your posts or experimenting with your interactive content? If so, you can look forward to seeing a lower churn rate the next time you calculate your total.
Bottom line on churn rate
As you can see, there are plenty of practical ways to reduce your churn rate. When you're trying to lower this number, it's essential to recognize that you'll likely never hit a churn rate of 0%. There will always be some people who were not satisfied, even if you tried your best. Instead of beating yourself up about this situation, use it to your advantage.
If you pivot your goal from "zero" to "as close to zero as possible," you'll find that your journey to reduce churn becomes a much more manageable process. With practice and experience, you can get to know the people who frequent your website.
Use this knowledge to create content across all platforms that entertains and delights your customers. When the people who invest in your product or service are happy, you can bet that they will stick around to see what exciting content or promotion you'll offer next.