Since customer churn already sounds like a recipe instruction, let’s keep the food analogy going. Imagine you’re having a dinner party. You pop your signature lasagna in the oven and leave it to bake. Then you turn your attention to the side dish, appetizer, and drink recipes. Suddenly, you realize that you’ve forgotten about the lasagna.
There goes the smoke alarm.
In sales and marketing, we often get so focused on gaining new customers that we forget to pay adequate attention to existing ones. As a result, they start heading for the door. But your existing customers matter. A lot. Even a small increase in customer retention can decrease acquisition costs and strengthen your bottom line.
You can strike the right balance between gaining new business and customer support by keeping an eye out for a few red flags. These indicators will tell you if business is about to leave. Of course, it also helps if you have the right technology in place to track these metrics. Business intelligence tools and customer relationship management (CRM) software are fairly common. You might also consider a dedicated customer retention/loyalty solution.
Seven Indicators of Customer Churn
- Usage is Declining – A customer who has been regularly using your product isn’t likely to suddenly drop it. Usage decline happens over time. Then cancellation occurs when a customer realizes they are paying for a product they’re not using. If you notice a decrease in usage, reach out to your customer. Maybe he or she needs help or would like to learn about new features. In any case, a customer will be glad to hear you care.
- Increased Traffic to Your Cancellation Page – In this case, your customer practically raising a flag of retreat. Use analytics to track visits to your cancellation page. If you can’t pinpoint and contact exact customers, you can at least look for a rise in overall visits. They may be an indicator of an overall flaw in your product or negative word-of-mouth that’s been spreading.
- You Haven’t Been in Touch – Keeping in touch with customers is important to demonstrate new advancements, check in for feedback, proactively address problems, and generally show that you care. If you haven’t been in contact with your customers in a while—whether that’s through a newsletter, personal email, or phone call—you could be missing important information about their customer experience.
- Customers Are Angry – When you get complaints or notice a drop in your Net Promoter Score®, it can sometimes feel like a lost cause. But often an angry customer doesn’t want to leave your business, they just want you to apologize and fix the problem. Sending regular surveys to your customer base will help you determine any pain points and address them before customers throw in the towel.
- Customers’ Payment Method Expiring – A simple but effective way to retain customers is to stay on-top of their payment methods. People are busy, and many customers fail to renew a product after their payment method expires. You can avoid this by keeping payment expiration date as an important metric and proactively seeking an update. This will also prevent you from providing free service after a card expires.
- Customers’ Contacts Have Changed – If you have great sales reps, it only makes sense that your customers would get attached to their service. Employee turnover or the passing of customers from sales to account management can be a trigger point for customer problems. Whenever a point of contact changes, be sure to make a proper introduction and reach out after a time to see if everything is going smoothly.
- Customers are Less Engaged – Content analytics exist for a reason, so be sure you’re paying attention to what they say. If a customer who frequently opens emails, visits your site, or engages on social channels suddenly has a drop in engagement, it could be a sign they aren’t interested in your product anymore.
Your existing customers are the lasagna of your business—your staple, your go-to, the thing that keeps you from going belly-up. Keep an eye out on the data and behavior that indicates their level of customer satisfaction and you’ll avoid getting burned by bad customer churn.