retention of customers

Retention of Customers Strategy

Acquisitions alone won’t be enough to keep subscription firms alive. Now that it costs at least 5X more to gain a client than it does to keep one, it’s simply not a profitable method to expand.

Companies today must do all possible to increase the lifetime value of the clients they have worked so hard to win since there is more money to be made after the original purchase. Here are three strategies for expanding your company while retaining customers.

1. Establish teams based on client relationships

A subscription business strategy necessitates demonstrating to your clients an ongoing return on investment (ROI). You must be prepared to serve clients over the course of a long-term partnership rather than just during a single transaction. This entails adapting our product sales strategies, hiring leaders who will interact with customers, and establishing a turnover target.

It’s crucial for businesses to prioritize retention just as much as they do an acquisition. That implies that the sales team needs to be retrained to ensure that consumers buy and are successful for six to eighteen months. Leadership in sales, marketing, and other areas must be driven and rewarded to maximize every stage of the customer lifecycle, not only new reservations, upsells, and renewals.

When it comes to measuring, corporate leadership must let the rest of the firm know about a single churn target. To keep clients coming back, the entire company must actively demonstrate to them how to comprehend and love the products they are purchasing. This is far easier said than done, in my opinion.

Every team affects retention, but this can cause confusion about measurements and how the company defines success. Every department will take a different approach to retain clients and lowering turnover. Therefore, a top-level company-wide churn KPI should be established, allowing many divisions to create their own strategies to contribute to the achievement of the common objective.

2. When a consumer cancels, you can learn from them

When it comes to acquisitions, most businesses go all in. Teams are mobilized around the funnel stages, campaigns are optimized based on what’s working, and conversion numbers are their only concern. Customer churn can be considered from the same perspective.

A churn funnel is a personalized experience based on distinct client factors, such as account type, billing plan, area, length of account, and so forth, and it starts at the point of cancellation. A churn funnel’s objective is to bring consumers back to your company. To keep consumers, you should always strive to meet their needs.

Exit surveys are common in most businesses. Product and customer success teams are regarded as best practices for gaining a deeper understanding of the reasons why consumers leave and then taking action to make improvements. However, businesses rarely go one step further and try to persuade clients to stay when they are about to cancel. They are passing on an opportunity to provide proactive client retention given that 15–30% of customers leave owing to problems that can be fixed, such as a difficult onboarding process or difficulty using a feature.

Companies can try to meet unmet demands as customers travel down the cancellation funnel by tailoring offerings to the specific cause for cancellation. Despite all the names, definitions, and theories, cancellations mainly occur for a few reasons, including issues with the product, an inability to execute, shifting customer demands, pricing uncertainty, subpar service, and internal or corporate changes. Many of these problems can be fixed right away to lower churn. A customer’s decision to stay can be influenced by their ability to re-join, earn a discount, or find the information they require about a product.

Not all cancellations are final. Customers are more likely to express this as a sign that their expectations aren’t being met. It’s not too late to step in and assist your consumers in discovering what they were seeking when they initially opened an account. A churn funnel is nevertheless useful even if some clients will undoubtedly be lost causes. By gathering information and comments during this crucial time, your teams may adjust to lower churn going forward.

3. Personalize retention

An effective retention approach is scalable but not impersonal. This is difficult. Most high-volume subscription firms, especially those in the consumer sector, don’t have a consistent customer base. A vast subscriber base is made up of a variety of individuals who all have different viewpoints and shouldn’t be handled in the same way (not for much longer, at least).

Accurate information is necessary for the personalization of the customer experience. To create a complete picture of your consumer, you must organize data from several sources, including demographic information, product usage, payment history, and support interactions. It takes less time for businesses to spot trends and act when they use a single source of truth for their consumer data. It also makes it easier for teams to monitor their performance in relation to the overall business churn objective.

Next, specify the parameters that signify when your clients are successful (e.g., they watch a certain number of shows per week, use a combination of features, or reach a certain maturity level). To engage customers based on this success value, then align your engagement tools with push notifications.

Along with all of this, you must spend a lot of time conversing with customers. You’ll get the qualitative context you need to interpret churn data and trends by listening to their unfiltered opinion and conducting surveys to record feedback in their own words.

No matter how strong your channel strategy is or how impressive your conversion metrics appear, if you aren’t keeping your users, adding more water to a leaking bucket won’t do much good. Growth without retention just won’t significantly increase your consumer base. In today’s subscription and SaaS businesses, retention may not be as glamorous as acquisition, but it is no less effective in fostering business-critical growth.

Work 365 is subscription management and billing automation software to streamline recurring revenue and improve cloud business. Work 365 gives MSPs peace of mind while also enabling sales to use Microsoft New Commerce Experience (NCE) in their plans for attracting new clients and strengthening bonds with current ones.