Your best customers are the ones who will be loyal to your company and spend their money with you rather than go elsewhere, even if they can find a cheaper product or service. These are the customers you never want to lose!
This is especially relevant if you provide some kind of subscription service where your business lives or dies based on how many subscribers you retain.
So how can you minimise the chance of that ever happening?
Here are four unusual ways to reduce churn rates and increase overall customer lifetime value.
1. Set the right expectations.
The number one source of churn is actually setting the wrong customer expectations. How does this start? During the sales process.
Here’s the problem: salespeople are trying to close deals every month to meet their quota. So sometimes they might sell to the wrong customer (a buyer who doesn’t really fit into your target market) or make lofty promises that go beyond the reality of the services you provide.
You need to know what your salespeople are selling. Make sure it aligns with what you actually offer.
How can you ensure your salespeople are laying out realistic expectations and targeting the right customers?
One of the worst things you can do is implement a clawback, where a sales commission goes away if your customer doesn’t last for a set amount of time. This is negative punishment and is absolutely terrible.
The smarter way to do it is to give everyone a commission for the sale, then add a meaningful bonus or deferred compensation that is payable based on retention. So if a customer lasts longer than 90 days (or whatever threshold you choose), then your salesperson earns the additional compensation. Totally positive reinforcement!
2. Build meaningful relationships.
You’d think that helping you customers achieve success through use of your product would result in less churn. Nope.
In fact, we found a negative correlation between quality of the results that were being delivered and the average customer retention duration. The better performance we gave, the more likely they were to churn — we helped them out so much they didn’t need us anymore!
You’ll actually find more success by focusing on building a personal relationship with your customers. Make sure you’re on good terms with the stakeholders. Try to be their best friend.
Having fun, great calls together correlates strongly to longer customer lifetime value. You’ll find this is true of pretty much every product or services company.
One way to do this is to avoid switching your customer service people around a lot. If your customer service person is changing every three months, it will be hard to build any sort of meaningful relationship with your clients.
To discover two more ways to retain loyal customers you can read the rest of this articles here article here… www.inc.com