Customer leakage: how it threatens and how to reduce it

Any company is interested in expanding its customer base, but we should not forget about the importance of retaining existing customers. In this article, we offer you some simple tips to help avoid customer leakage.

What is customer leak and how to calculate it?

Customer churn (churn rate) is an outflow of customers (subscribers, users) who maintained relations with the company. It can be presented in the form of various indicators: the number or percentage of lost customers, as well as the cost of losing each customer.

Customer churn is usually calculated using the following formula: divide the number of lost customers by the number of customers that was at the beginning of the month.

For example, we had 150 clients, by the end of the month it was gone five, customer leakage is 3.3%. There is a special service for calculating customer leakage as a percentage.

And what if we want to take into account when calculating and new customers who have appeared with us within a month? Let us consider an example.

Suppose we have a firm "Cutlets from Uncle Günther," in early January, she has 500 clients, of whom 15 left. Within a month, the "Uncle" got two hundred more clients, of whom four left. Calculate:

The number of customers at the beginning of the month - 500

Customer leakage - 15 (3 %)

New customers - 200

New customer leak - 4

General leakage - 15+4=19

Total percentage leakage - 19/500=3,8 %

Let's try to compare the figures at the beginning of the next month and calculate whether the customer leakage rate is growing:

The number of customers at the beginning of the month - 681

Customer leakage - 20 (2,9 %)

New customers - 300

New customer leak - 5

General leakage - 20+5=25

Total percentage leakage - 25/681=3,67%

Leakage of customers decreased slightly, cutlets are sold, everyone is happy.

The impact of customer churn on business is most clearly expressed not by interest, but by lost profit. In the first example, customer leakage was 3% - is it a lot or a little? Suppose that the average possible profit from a client who’s gone is 30 thousand, which means we lost almost half a million in a month.

When we figured out how to calculate customer leakage rates, let's see how to deal with it.

1. Meet customer expectations

A client whose expectations were deceived will not return anymore - this is obvious. Correctly form the client's idea of ​​the service provided is the task of your sales manager. Promise the client a little less than you can provide, and he will be pleasantly surprised.

Customers like it when you exceed their expectations, this greatly increases loyalty to your brand. A loyal customer will tell your friends about you and will contact you again.

2. Be an expert

People listen to the opinion of the pros of their business and use their services again and again. Having crammed the cones and “catching up on cheapness”, the client will prefer to contact an expert from whom he will receive exactly the result he is counting on. A professional in his field who constantly develops and understands the latest trends will not be left without clients.

In pursuit of the provision of expert content, try not to make the mistakes that we wrote about in this article.

Keep email newsletter

In your newsletter you can talk about important events in your area, the latest news and services. Do not forget to include links to articles in your blog in the newsletter text. Thanks to the email newsletter, you will not only provide interesting information to your customers, but you will not fall out of their memory.

See also: Choosing the best email-service: review and comparison of the 26 most popular companies on the market

Start blogging

Post on your blog a variety of content that will be really useful to readers: guides, lifehacks, reviews, interviews and just interesting articles on the topic of your industry.

Our business director, Vladimir Shumov, told the following story: "A client comes in, says he turned to Texterra on the advice of his friend H, who never worked with us, but read the blog and advised us to a friend based on it."

3. Build trust

Trust is the basis of business and building relationships with customers strengthens it. Relationship marketing has recently become increasingly popular, because simply providing a service is a long time indicator of non-competitiveness, you need to stand out for quality and earn the trust and respect of customers and partners. Show the customer interest in his business, build and develop long-term mutually beneficial relationships.

Let customers know how much you make for them. As clients, we often set a task for a company that needs to be completed without thinking how hard it is. Therefore, there is nothing wrong with writing to the client something like: “I worked on your project all Sunday, and I got the idea that we should do N and change a couple of points in Y”. Thus, you will not only maintain contact with the client, but also inform him that you are working on his order even on your day off.

4. Provide service at the highest level.

Would you like to come back to the restaurant with dirty tables, rude waiters and tasteless food? The answer is obvious. People remember negative experiences well. Providing not only the quality of the service or product, but also a high-level service, motivates customers to come back to you again and tell friends about your brand. The high level of service includes the following key points:

  • employee interest in meeting customer needs
  • ensuring quick response to applications
  • delivery on time
  • support of the client both before and after the transaction
  • meeting customer expectations
  • prompt resolution of emerging issues

A poorly organized service sends customers straight to your competitors.

5. Special conditions for regular customers

Show customers that you appreciate them and remember them - encourage, motivate to re-cooperate. A classic example of such support is the system of discounts and bonuses.

A cosmetic brand NYX reports promotional code for discount mailing subscribers:

See also: Customer Relations: Why an Old Friend is Better than New Two

6. Listen to your customers

This is a simple and effective tactic. Conduct polls, communicate in social networks and comments on the blog - so you can find out what customers like and what does not suit them in your products or services. Feedback will help you not only to improve the quality of service and product, but also to avoid customer dissatisfaction in the future.

Here are three key indicators that you need to track:

  • Opinion of a particular client. Find out what he likes, what he would like to change and push off from it.
  • Customer opinion received after a certain period of time. So you can track what has become more efficient, and what else should be improved.
  • Preliminary survey. Reveals customer expectations from your brand.

Also consider complaints. Dissatisfied customers for the most part go silently, and the information that you have gathered from the complaint will indicate your weak points and help to become better.

7. Return "lost sheep"

When it comes to business, there is nothing wrong with writing an “ex.” Why spend huge budgets on expanding your customer base, if many of your inactive clients are now ready to cooperate, you just have to offer it correctly. Repeated cooperation with already familiar customers is an easy way to increase your income. Establishing contacts will not only remind customers of you, but also demonstrate that you still remember and appreciate them. "Returned" customers are usually the most loyal. How to return customers who unsubscribe from email-subscriptions, we wrote in this article.

Keep your balance

Attracting new customers and keeping old ones is absolutely normal and correct. Customers are interested in you, and you are interested in them. The main thing is to keep balance. Provide an excellent product and provide quality service, become better, raise the bar, develop, treat each client like a big fish. But do not chase a client, do not ask him: “Well, buy-and-and!”, Do not dance with a gypsy with the exit, just to get a deal. Conduct your business with dignity, build healthy, mutually beneficial relationships with customers and partners.

Watch the video: New research shows CBD oil could help reduce life-threatening seizures in dogs (December 2019).

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