| Nov 17, 2015 | | 3 min read

Old Customers are Worth More than New Leads: 5 Ways to Reduce Churn


Marketing departments often feel the crushing weight of meeting audacious lead goal targets. While striving to achieve those bold numbers is important—essential even—there is one thing more important than new leads: old customers.

A repeat customer spends 67% more than a new customer. Doesn’t take long to do the math—reducing client churn is a crucial key to getting ahead. Before you can reduce your churn, you need to know what it is.

How to calculate your customer churn rate

To calculate your churn rate, take the total number of customers you lost in a month and divide it by the number of clients you had at the beginning of the month. Exclude any new sales from that month. So say you had 100 clients at the beginning of November, and you lost seven throughout the month. You would have a 7% churn rate.

5 Ways to Alleviate Churn

  1. Set the right expectations
    That starts both with marketing and sales departments. The content you put out needs to accurately reflect your product, and your sales presentations should not over promise the value your company offers. When we have new features coming, we make sure to only mention a month or two out, as things can change fast at an agile company. So even though we’re excited about a feature coming down the pipeline, if it’s not scheduled for production yet, we tell our sales team to keep it on the downlow for a little longer.
  2. Regular communication
    Once you’ve onboarded your customer and got them up and running, it can be easy to leave the rest of up to them. The old set it and forget it attitude. We’ve found that for retaining customers, it is essential to keep a feedback and communication loop. We do this with a weekly newsletter, sales and product webinars and regular touch points with account and success executives.
  3. Active listening
    Make sure all your clients feel heard. If they have feedback on your product or service, is there an outlet for that? Do they know what email address they can use to request a new feature? Report a bug? Ask a question? In our first communications, we provide our clients with their sales contact and their partner education and support contact, and explain the best use for each. We also offer regular surveys and scheduled calls as a way to proactively address any issues and identify ways we can do our job better.
  4. Always get better
    Whatever you’re offering, make sure you don’t stay stagnant. As you continue to add value, you product or service will become more sticky to your customers. See if you can pass the toothbrush test: do they need to use your product once or twice every day? Be mission critical.
  5. Provide easy solutions
    No agency or business has a lot of time on their hands, of course. Your solution should work out of the box and offer a valuable answer to a tough problem your customer faces.

It’s a tough world out there for digital needs providers. Being mission critical to local businesses is a job that requires constant and ongoing effort. Check out these stats on local businesses from BIA/Kelsey to get a closer look at some of the realities and needs of local businesses of all sizes when it comes to digital. Smaller businesses want tools that work in a Do It Yourself (DIY) model without high-touch services that cater to their tight budget. Mid-sized companies have a little more wiggle room and typically outsource for Do It With Me™ (DIWM™ ) or Do it For Me (DIFM) services, allowing them to focus on other areas of their business. Larger businesses also look for outside support, but they really value high-touch services from sales and account management.

It's hard to get a piece of that digital marketing budget local businesses set aside, but being a partner--a really good partner--will keep you in the good books. And hopefully the check books, too.

We get it: customer churn is a huge, glaring problem. Check out our ebook on 14 Challenges Agencies Face for answers to help alleviate churn, as well as 13 other critical issues you’ve told us about.

About the Author

Nykea is the Director of Brand + Experience at Vendasta, where she leads the charge on brand storytelling and data driven marketing.

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