It's a recurring nightmare for those of us in the business world: your customers flocking to your competitors in droves, leaving you behind. Not only does it feel like a failure, but losing customers costs you revenue. According to Bain & Company, even a 5% increase in customer retention can produce more than a 25% increase in profit. That, along with your business nightmares, should be enough to motivate you to improve retention.
Improving retention, while a noble goal, is not always easy. Customers who have already decided to leave are very hard to keep, and your efforts to sell these customers on your company, again, may just frustrate them more. Website behavior analysis platform, Evergage, has an excellent real-life example of just how badly you can damage your relationship with customers by pushing them to stay.
So rather than risk further alienating customers that have already decided to leave, you should focus your efforts on retaining customers who haven't fully made up their minds. These customers are the ones debating leaving your company, but are still open to hearing arguments from both sides.
If you're lucky, these customers will be easy to identify because they'll directly tell you they're considering leaving. More often than not, however, at-risk customers won't contact you, and you'll need to identify them yourself.
The good news is that customers don't usually wake up one day and decide to switch away from your products or services. This decision evolves over time and they give are signals along the way. Let's dig into some of these signs that your customers might leave you.
Fortunately, many identifiers of at-risk customers are likely present in the data you already have, so little extra research and data collection is necessary. Here are six of the most common signs you can look for in the data you have right now.
Direct feedback, including negative reviews and complaints, is one of the best indicators of your customers' risk status. It's clear that these customers have a problem with your product, service, or organization, and just because they didn't explicitly mention leaving doesn't mean they aren't thinking about it.
It's essential that you reach out to these customers because they took to the time to reach out to you, or other consumers, about their problem. Their issues don't usually resolve themselves on their own. Publicly frustrated customers deserve a response.
Negative Feedback is An Opportunity
When you reach out, be sure not to view these customers, complaints, or reviews negatively. Look at them as opportunities to identify weak spots in your business and use them to improve. If you act quickly to solve your customers' problems, they'll feel valued. And since research indicates 68% of customers leave because they feel like companies don't care about them, showing your customers you do value them will go a long way toward retaining their business.
Not all customers are going to tell you directly that they're dissatisfied, so your next risk indicator is online customer activity. Look at the interaction your business does and does not have with customers in social networks and in your online community.
Customers who post sarcastic comments and questions about an area of your product that they are struggling with might be dissatisfied and at risk of leaving. Similarly, customers who stop following you on social networks or start interacting with your competitors might also be at risk. Keep in mind that the interaction that you don't have is just as important as the interaction you do have. If your customers are nowhere to be seen, that's a clear warning sign.
Your customer community platform is like your own personal crystal ball. Leverage your customers' online behavior to proactively reach out to struggling and frustrated customers.
There are two main types of disengaged customers, those who aren't using your product or service, and those who are not interacting with or responding to your brand. Customers who aren't using your product, especially for long periods of time, may no longer have a need for the product or company. To keep these customers you'll need to find an alternative solution that's more relevant to your customers' needs.
For customers who are not interacting with your brand or are unresponsive to e-mails, surveys, and other interaction, evaluate satisfaction levels. Engagement and responsiveness is often indicative of customer satisfaction, with lower engagement or response levels tied to lower satisfaction. Contact these customers to find out if there's a problem, and if there's any way you can remedy the situation to improve your relationship with them.
When customers start looking for discounts, it's a strong indicator that they don't see the value of your solution. It's possible one of your competitors offers a similar solution for less, or that the customer sees your product as a luxury that's not worth the money. In either case, these customers are at risk of dropping the product or service entirely, or switching companies.
Head this off at the pass by making sure your sales and support staff address issues when speaking to customers who request discounts. They will need to differentiate your company and service from others on the market. You can follow up with helpful content including best practices, tips, and secrets to success to ensure your customers understand everything you have to offer. If necessary, you can also consider providing customers with the requested discount or a supplementary free product, both of which increase value.
There's only one reason why your customers are looking at cancelation and downgrade pages on your website or in your customer portal: they're thinking about canceling or downgrading. Even if your customers don't take any action to change their account status, this is still a major indicator that something is wrong.
Reach out to these customers to find out what the underlying problem is. Do they still see the value in your product or service? Are they dissatisfied with your support team? Once you've identified the base issue, take steps to fix it and ensure your customer is satisfied.
Trigger events are any events or changes that motivate your customer to leave. They include changes on your side such as new account managers or a business value shift, as well as personal changes for your customer, such as moving to a new city or switching jobs. Changes in any of these areas could impact your customer's problems and the solutions they need from your company.
Try to identify trigger events when they happen and reach out to customers to help them understand the benefits of your organizational changes, or ensure that your solution continues to benefit them through their own life changes.
All six of these indicators are probably present in the data you already have from your customers. Reviewing online activity data, support conversations, and product use records with these indicators in mind is a great way to start identifying your at-risk customers.
Once you have an idea of who might leave, it's essential that you take steps to define the problem, fix it, and retain their business. Implementing a systematic approach to uncovering at-risk customers and reaching out to them impacts satisfaction, engagement, and your overall relationship with customers.