Customer Churn: 5 Actionable Strategies to Retain Your Customers

This article on reducing customer churn is part of our CX Optimisation Guide.

As we saw in a previous article, The Top 5 Causes of Customer Churn, the biggest reason your customers are leaving you is because of an unsatisfactory customer experience, caused by complex processes, business inertia and inefficiency.

Improving CX doesn’t just increase customer retention, it also permits you to put a premium on your service. PWC research in the US shows that while one in three consumers will walk away from a brand they love after just one bad experience, companies with an exceptional customer experience can charge more than their competitors. For example, car insurers can charge 7% more and telecoms 8% more.

So, to help you retain your customers, we’re going to run through our learnings and give you some meaningful tips to combat customer churn.

The cost of customer churn

First off, let’s look at why reducing churn is so important.

When customers leave, you not only lose revenue, you are also obliged to spend even more money acquiring new customers to replace them.

It’s already more expensive to acquire customers than it is to retain them, but it’s getting even more expensive. A 2019 paper by Profitwell showed that customer acquisition costs (CAC) rose 60% for both B2B and B2C companies over the previous five years.

To make things worse, you are losing out on the opportunity to upsell or cross-sell to your current customers. While it’s too early to explore new products with newly acquired customers, an existing customer is more likely to try a new product and spend more.

After all, the reasons it will be hard to acquire new customers are very likely to be the same (or related to the) reasons why existing customers are leaving. Fix the reasons for churn and you will have a better reputation to market your products and services to your prospects.

How do I reduce customer churn?

We can only change what we can control. Sometimes, there’s nothing you can do to prevent a customer from leaving you. Their circumstances may have changed that have nothing to do with your service.

What you can change are the parts of your business that impact customer experience.

The following are all manageable steps you can take to improve interactions with your customers at each touchpoint on the customer journey. Small steps can make a big difference.

1. Remove inefficiency from your back office

As a customer experience management business, we see a lot of companies with inefficient operations that are inadvertently making life difficult for their customers.

And the causes are usually:

Manual back-office processes that increase the time it takes for your customers to get the outcome they want.
A reliance on paper-based communications – high cost and slow.
High volumes of calls to the contact centre because a customer can’t achieve what they need without help.

In a word: inefficiency.

Customers must be updated regularly to keep them engaged, and in many sectors, it’s a regulatory obligation, but many companies still rely on paper forms being completed manually to capture pivotal customer information. This can be costly, inaccurate and inefficient.

Digitising this process – for example, by going paperless with your application forms – can have a positive impact on several parts of the customer journey.

You will invariably have more fruitful conversations with customers that result in better outcomes. Which means fewer confused customers calling for updates, or with issues to be solved.

So why doesn’t everybody make these changes?

Well, the legacy systems and processes that cause inefficiencies can be difficult to replace. Especially if there is no business capacity to drive change, or a siloed organisational structure where accountability for change can be spread across multiple teams, and nothing gets done.

But digital transformation doesn’t need to be all-consuming. By making tactical changes in your back office, you can reduce the manual tasks that are causing inefficiencies. Projects to deliver these kinds of changes can be delivered quickly, in under 3 months.

And with a solutions provider that can deliver with only minimal involvement from your IT team, you can easily identify the issues and solve them rapidly.

2. Reduce friction in your customer journey

If you are experiencing customers dropping out from or not renewing your service, it might be time to look at your customer journey.

What are the key touchpoints causing friction? How many of them are there? How hard are you making it for your customers to get what they need.

The answers to these questions can shine a light on why they are leaving you and moving to a competitor.

This is not only true for your processes, but also the user experience of your website or platform. Is it too hard to navigate? If so, that may be why your contact centre is receiving a higher number of calls than anticipated.

When we look at customer journey maps, we want to identify the internal problems that are causing inefficiencies and friction points. So one of the best questions we can ask is:

“How do the operational processes make it harder to give your customers the experience they expect?”

We map customer journeys against the underlying business processes that are associated with each customer touchpoint. Without this, a customer journey map is only an imaginary ideal that doesn’t necessarily reflect what your customer experiences.

At Adare SEC, we run customer journey mapping workshops with the objective of identifying the underlying business process issues that cause inefficiency, of reducing customer touchpoints, digitising processes, and focussing on how best to utilise your resources. Focusing on what the customer experiences doesn’t provide the full picture so we go behind the scenes and create a landscape that is conducive to providing excellent customer experience.

Find out how we would run a customer journey mapping workshop for your business. Leave your details and we will get in touch.

3. Don’t make it hard to renew

Renewal is a moment of potentially high attrition. If your renewal process is difficult to navigate, it’s likely you will see more drop off, and you will lose out on the opportunity to add more services to the contract.

While your renewal rate is a reflection of your customer service over the full contract term, customers become acutely aware that they have a choice at renewal time.

If your communications leading up to and during renewal are slow and inefficient, or the renewal process is clunky in any way, customers are more likely to look elsewhere. Confused customers seeking updates will further slow down your contact centre, exacerbating the issue for others, and costing your business – on average it costs businesses £10 per call.

The inefficiencies that cause your teams to be stretched make it difficult for them to deliver an excellent customer experience. But with more efficient, cost-effective processes in place, your team will have the capacity to focus on delivering a superior experience across the whole customer journey.

The changes you can make to your back office need not be intensive. For example, removing paper from the renewal process (often taking weeks from start to finish) and replacing it with a digital process that can be completed in minutes.

A single change made at the operations-level can make all the difference.

4. Go multi-channel for higher efficiency

All companies operate multiple channels. But not all have the ability to communicate on the right channel at the right time.

Customers expect their service provider to understand their needs, but what is missed is that they also expect them to act as one single entity. It’s important to have a single view of the customer or departments may send out conflicting or inconsistent communications.

For example, in a siloed business, an insurance customer who is up for renewal is also changing address and making a claim – each process triggers three separate actions and three communications are sent out. The customer receives letters from each department ignoring or unaware of the others. An expensive way to do business.

This could be one interaction – instead, it is split into three, long and tiresome processes.

With a coherent multi-channel capability, the letters could have been one email or an SMS that links to a portal on the company website, where the customer can fill out the forms digitally and accurately (with real-time data validation.) And if any part of the process is left unfinished, follow up emails or notifications can be triggered automatically.

By using the right channel at the right time, your customer will see you as a single, coherent service that doesn’t demand their time and effort to use.

5. Empower your changemakers

To be able to make the kind of changes we’ve discussed above, you need to allow your people the capacity to do so. Empower those running the operation to solve these problems. This means your operations managers, business improvement managers and customer success managers, and your heads of departments.

With every seamless experience the customer sees on the front end, there is often a stretched operations team manually completing any number of tasks backstage. Providing them with the operational tools to improve how they process customer interactions will retain, if not improve, the quality of the customer experience as well as make employees lives easier.

This is not an expensive top-down digital transformation programme with large consultancies consuming your budget. Tactical, operationally led improvements can be implemented at a department level, without the need to involve the C-suite.

For example, you pinpoint a moment of friction in an account transfer process: using paper forms. There is no need to overhaul your entire system where a small optimisation will work. Here you can plug in a digital process that replaces the manual printing, posting and data entry required when working with paper based forms with a fully branded “account transfer portal” using digital forms. An agile project like this only requires the authority and input of the operations manager so you can start seeing improvements quickly. Furthermore, with relatively low costs when compared to enterprise wide initiatives, budget sign off can be made much more straightforward by keeping expenditure under levels that require higher levels of authorisation.

When managers feel empowered (and freed up) to do more than keep the system running, they can and will implement changes that are low cost, but high impact. These are the conditions that nurture innovation.

Fixing churn is an inside job

Customer churn will only go away when the internal processes causing it are re-engineered. Sometimes you need to completely overhaul your CX architecture. But it’s not often possible to do this quickly.

In the meantime, damage to retention can be alleviated with continuous internal improvements that don’t require buy-in from the C-suite. Tactical business improvements will increase efficiency and reduce costs in the back office.

In our experience, digital solutions that enable multi-channel, two-way customer communications are vital to this. And a good vendor will do most of the heavy lifting and only require minimal involvement from your IT teams.

If this sounds like it will help you, then we would love to listen to your needs, and discuss how to help you reduce churn, increase customer retention and offer an exceptional customer experience.