Why Customer Retention Programs are so Important for High - Churn Industries


Customer churn, also referred to as customer turnover, attrition or defection, is the number of customers or subscribers who never stopped using your product or service within a set period of time. Ironically, the focus of marketing experts is devoted to customer acquisition. But reducing the number of customers who abandon your service or product is far more important, more so for high-churn industries.

  • Why Customer Retention Programs Matter

If you’re wondering why customer retention schemes and strategies are absolutely essential for high-churn industries, consider the numbers. Bain and Company conducted research to find that customer acquisition costs 6-7 times the amount it takes to retain and sell to existing clients.

Harris Interactive further found as much as 72% of the customers with a memorable buying experience shared their delightful experience with others. Market Metrics also revealed that the probability of selling to existing customers is anywhere from 60% to 70% while the probability of selling to new prospects is a fraction of that, at 5 to 20%. Even the US White House Office of Consumer Affairs indicated that on average, loyal clients are worth 10x times more than their first buying or purchase amount. 

  • How Do Customers Remain Loyal?

So, the incentives to reduce high-churn are many. But so are the issues. Lowering customer churn means understanding your customer’s requirements and anticipating their needs. When you’ve mapped out a sales cycle, it is equally crucial to base customer retention programs on what visitors actually do and how many purchases they make.

When you understand the demographics and characteristics of customers interested in your products or services, you are well-positioned to manage them. Cater to the target audiences and niche customers by narrowing down your focus. Discover the real and sustainable potential of your service.

  • The Value of Effective Onboarding

Decreasing churn rates, especially in high-churn industries and verticals, essentially needs to emphasise valuing clients the minute they enter the sales life cycle. The onboarding process is absolutely critical, as once a customer has signed up, they are likely to respond to marketing messages and trust your brand, if you provide them all the information and help they need. Invest in effective onboarding and customers will trust you immediately.

  • Keeping Customers Engaged

Once the customer is onboard, the next step is to engage them. This can be done by educating them further, on using the products and services and leveraging the offerings for successful outcomes. Automated marketing solutions can make the process easier. Do offer knowledge customers need so that they can get observable outcomes. Being structured and rewarding customers, besides highlighting success stories and use case studies to help customers discover ways to get more from products. Being timely and mapping out life-cycle stages of customers and how to market to them is the key here.

  • Deliver on Promises

Customer retention programs should focus on loyalty discounts and deals, as much as delivering on promises. Bad service, unkept promises, and imperfect products are all problems you need to tackle. Behaviours that lead to customer churn should be tracked. But most of all, you need to stand for value, quality and exceptional ROI, too.

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