Customer churn and the importance of bringing customers back
Did you know you customer churn rate has a direct impact on your customer lifetime value and the ability to grow your business? Well, customer churn rate is simply the percentage of clients who have canceled business with you, within a given period of time. Companies typically classify a customer as ‘churned’ after a specific team has elapsed since their last interaction. Knowing your customer churn rate is a key component to business growth. Knowing your lifetime customer value helps companies allocate marketing costs for acquisition. Before you can calculate your lifetime customer value, you must calculate your customer churn rate.
With so much emphasis on customers who are on the churn these days, it can be easy to lose sight of just why you’re in business to serve customers. Therefore, the best solution is to win back these customers to help you rebuild your strategy and work in line with them. Winning back customers is very helpful as they stand out from the crowd and remain profitable to your company. Besides, companies who have won back customers have often revealed that they have outpace their competitors in innovation.
Old customers are always a valuable source of sales for every business because they know a lot about your product and services. They already know your business and were once interested in buying from it, so you may be able to persuade them to come back. In most cases persuading them back may prove somewhat tricky, hence you need the right strategy to win them back. One of the top strategy is first know your weakness and try to understand why they left. Afterwards, you can come up with the proper plan that will help win their hearts back.
Apart from identifying your weakness, you should ensure you talk to them and get enough feedback that will help you keep track to know if you’re winning them or not. As you keep track, you can deliver on your competitive advantage as you assure them of your improved services and make sure you avoid wrong decisions and bad PR.
- Book: Customer Winback: How to Recapture Lost Customers – And Keep Them Loyal by Jill Griffin, Michael W. Lowenstein. 2002, USA
- Hubspot – Lost a Deal? 3 Phrases That Increase Your Chances of Closing it in The Future