Surprisingly, a lot of companies aren’t aware of their customer churn rate. They know not every customer sticks around but aren’t aware of the extent of the problem.
Some churn is normal. Even companies with great customer service experience a small amount of it. You can’t please everyone, after all, no matter how hard you try. It’s a fact of life.
However, the cost of losing a customer is so high that companies can’t afford to ignore it. No business can stay profitable if the customers they bring are slipping out the back. Companies that don’t keep track of churn won’t be able to gauge the health of their business or the effectiveness of their customer retention strategies.
The good news is that most companies already track customer churn. They might not call it that. It might be called “customer attrition” or “customers lost.”
Some companies approach it from the opposite angle, like “customer retention,” which will be higher than churn because it tracks the customers who stay rather than the ones who leave. However, some quick math will tell you that if customer retention is 90 percent, then customer churn must be 10 percent.
Track Why Customers Leave
Winning customers is so difficult that the best thing to do is not lose them in the first place. To do this, you need to know why they are leaving.
Again, your company probably collects this information already. When a customer cancels their subscription, there is normally a survey or questionnaire that gets sent out asking why.
Usually, these kinds of reports also give you information on “deals lost to competitors” and may even list the company they switched to.
Companies vary so much when it comes to this type of information that it’s impossible to say for certain what they are collecting, so ask your leadership team. Once they see the value of this data, no doubt they will be eager to expand their efforts.
Until then, start with what information you have. As a salesperson, you probably have a rough idea of how many customers have been lost because it’s the only way to know how many you have to recruit. There’s a chance you even know why some of them choose to leave because you talk to them regularly. Begin there and quickly you’ll be able to work out what it is you’re not offering that they want.