Customer churn has always been a major concern for most modern e-commerce brands. The financial implications of losing customers and trying to win them back are often far-reaching and affect sales and profit margins. Therefore, churn can deal a huge blow to any business model if left unchecked. This has inspired companies to prioritize customer retention through churn management strategies. While it is impossible to reduce the churn rate to zero percent, there are a handful of strategies that can reduce the numbers to acceptable numbers. The use of CRM software is one of those promising strategies being used today to stop customer churn.
WHAT IS CHURN MANAGEMENT?
Churn management is the process of controlling the rate at which customers stop using a brand's products or services. It is a strategy aimed at improving customer retention and easing the pressure of acquiring new customers. Because it is significantly cheaper to retain customers than to acquire new ones, forward-thinking companies are now shifting their focus to services and campaigns that create long-lasting relationships with customers.
When a company neglects its customer base, it eventually causes ruptures in the relationship with the customers. Therefore, the first principle of customer churn management is it understand and identify of the causative factors. Steps can then be taken to correct the deficiencies that cause churn. Statistically, 89% of companies say that excellent customer service plays a major role in customer retention. Currently, CRM software is one of the most powerful tools available to improve customer service. Therefore, if used correctly, it can play an important role in churn management.
HOW DOES CRM SOFTWARE CONTRIBUTE TO CHURN MANAGEMENT?
CRM software is highly regarded for its versatility in several areas, including customer churn management. Here are five ways it can boost your customer retention efforts:
PERSONALIZED COMMUNICATION
Customers are likely to return to a company that prioritizes them. Personalizing communications makes customers feel like a priority. According to Epsilon, personalized communication can lead to an increase in customer retention. CRM software can help companies communicate with customers in a more individualized and targeted way by storing and analyzing customer data. By providing personalized communications that keep customers engaged and satisfied, companies can better understand their customers' unique needs and preferences. Consequently, it helps churn management.
MONITORING CUSTOMER INTERACTIONS
Monitoring how customers interact with a company's services is the best way to identify reasons for customer churn. According to American Express, 78% of consumers aborted a transaction due to poor service interaction. With CRM software, organizations can monitor interactions between customers. This allows brands to identify problems and achieve better churn management. Using this data can improve the customer experience and solve any issues that may be driving customers away.
COLLECTION OF FEEDBACK
Churn management requires inspecting for issues that could potentially lead to churn. It is possible to obtain this information through feedback. Plus, there's feedback at every touchpoint of a business, including social media. In fact, 20% of the customers who experience poor service complain on social media. CRM software can collect feedback through various channels, including surveys, customer service interactions, social media, and online reviews. Overall, collecting customer feedback across channels helps companies better understand the customer experience and pinpoint areas for improvement.
IDENTIFYING CUSTOMERS WITH HIGH POTENTIAL TO CHURN
As mentioned earlier, CRM software collects data from customer interactions across channels. Embedded in this data are patterns that may suggest a high risk of customer churn. Some methods of pattern observation include predictive analytics, tracking customer activity, monitoring customer satisfaction, and analyzing customer data. Companies can integrate CRM analytics to receive accurate results by setting parameters that meet typical churn cases.
CUSTOMER SEGMENTATION
An Infosys study found that companies that segment their customers have a 9% higher retention rate than their counterparts. Businesses can segment their customers using CRM software based on several factors, including demographics, past purchases, and lifetime value. Therefore, because of the ability to focus retention efforts on specific customer segments, companies have a higher chance of success with churn efforts.
in short, CRM includes many features that can be critical in churn management. It's up to companies to recognize its potential and integrate it into their short- and long-term plans to improve customer retention.
