How to Minimize Your Business’ “Churn Rate” – (And Why You Need to Know How!!) – Part 1
Heard of churn rate?
No? Oh oh!!
Let’s say your business is a water bottle or a bucket. The churn rate, in a nutshell, is the rate at which your big business water vessel is leaking out customers – to put it visually. Businesses with high churn rates are at risk of spinning their wheels or even losing money. For example, a business with a churn rate that is equal to its rate of growth will not only have no net growth, but could also be losing money if it’s paying into an advertising and marketing budget to acquire those customers that help its numbers stay “even.”
Further complicating the situation is the fact that churn rate can actually be measured in a number of different ways. It can be
– The percentage of customers lost over a certain time
– The number of customers lost over a certain time
– The dollar value of recurring business lost
The bottom, line, however, is that a high churn rate is universally an indicator of the need for some patchwork in your business. This two part series is going to explore several ways in which you can actively combat your churn rate. More specifically, we’ll explore strategies for preempting churn. After all, it’s almost universally easier to retain customers than to reacquire them after they have “leaked out” for their specific reasons (and intuitively, this makes sense).
What are the strategies for reducing the churn rate?
1) Nail them with an impactful and positive first impression through your website. When someone signs up for your mailing list or subscribes to your services, you want them to be excited about being part of your ‘family’.
You DON’T want them to just barely cross the threshold – particularly if they were pushed or pulled to do so – and then be vigilant for the first opportunity to back out at the first sign of doubt.
For most online marketers, this means having professional, reader-friendly, aesthetically appealing and appropriate website whose interface and navigation are all designed from the beginning for a positive user experience.
Consider the job interview as an analogy. Just as a job interview is your first chance to make an impression on a potential employer, your website can be a first point of contact for impressing new leads.
2) Put forth a compelling offer. Certainly, you can impress people with a well-written and well-structured LinkedIn Profile or Facebook Fan Page or Facebook Group or a Twitter handle with an extraordinary number of followers.
However the website is ultimately your online infrastructure, that you can control, for conveying who you are you are and how you conduct business on the internet. Thus, whether it be transacting to sell products and services or for soliciting nonprofit donations, it also means putting forth a killer offer from the beginning that jumps out as a must-have (or a cause or campaign you must embrace and support).
3) Target your audience to generate the right traffic and opt-ins. By extension, this means getting your targeting perfect from the beginning. Landing pages need to be optimized for the search terms and/or channels people use to reach your appropriate audience. Thoroughly, split test your pages, investing the time and energy to slightly vary your landing pages to control certain factors while testing one variable at a time in terms of look (e.g font, font color, font size, headline), and even paths of entry to your website by having the traffic land on different pages.
4) Follow-up on promises! Anyone can make a good first impression by writing up a great offer, but your immediate churn rate will largely be determined by how well leads (or customers, clients, or supporters) feel their expectations are being met. If you promise a particular response time on inquiries or deliverables, keep to your promises and commitments.
For example, if you promise a solution, don’t fall victim to to the trap many internet marketers drop into by only giving away half solutions.
Let’s say you run a product on how to lose weight (whether as a sales promotion or a freebie). Your mailing list opt-in form promises a guide on how to lose your first 10 pounds. Some marketers would send a guide out with the first two steps of a four step method to dropping weight. But not you! No! You’re going to give a complete and comprehensive method that will really start to reduce weight.
You’ll be building trust. Though it’s counter intuitive, customers will be more likely to make a purchase of a weight loss system from you after you’ve already given them something that produces results. They won’t just walk away from you, using the solution you’ve already given them. What you’re selling next can help them build on the progress they’ve already seen.
This can apply to any niche!
If there is a delay or change in circumstances as to what you promised, notify your audience, tell them how you are going to make up for the lapse, and the make up for it. Integrity is the atmosphere and culture that prevents the holes in the “vessel” that is your infrastructure, and thus minimizes the leakage of your constituency (i.e. customers, clients, donors, etc.) – reducing your churn rate.
See you in Part Two.
Business, Nonprofit, Arts Consultant
Actor, Writer, Producer
Ragone Enterprises and Productions
Ragone Strategies and Initiatives
Transforming Vision to Value
Roberto Ragone has over 25 years experience in government, nonprofits, and business, working with them on strategic planning, marketing and public relations, fundraising, and outreach. He has also worked on literary, film, and theatre projects.
One of his guiding principles is a determination to help you attract popularity, prosperity, and prestige — fans, friends, funds, and fame. He helps define and disseminate the uniquely compelling story about you, transforming your vision to value so you “REaP” the benefits of your hard work.