Let’s be honest. Customer churn is part of business. The question is how can you reduce it? Here are some of the ways you can keep churn to a minimum.
1. Identify which customers are at risk of churning
Start by looking at your customer list. Which customers appear to be falling out of their normal purchase pattern? This can be determined using algorithms or AI technology. Because purchase frequency varies by individual, it really needs to be analyzed on an individual level. Some solid data science can help you determine who is in this bucket.
If you want to do a deeper dive, analyze these factors:
- Do they have anything in common? If so, what?
- Is a competitor stealing your thunder?
- Does communication frequency need to change?
- Do you have a problem at a particular store that needs to be addressed. Customer experience matters.
2. Re-engage them before they lapse
Once you determine who is at risk of churn, you can use your customer data to create triggered sends. Or, they can be included in episodic mailings if the timing works. A combo strategy is actually very cost effective. The trick is to catch the customer before they become entrenched with a competitor. This is money well spent as it is much easier and cheaper to retain a customer than it is to acquire a new one.
3. Create a compelling offer
If a customer is at risk of going to a competitor, create an offer that gets their attention and brings them back to your store. Be sure to use their previous purchase history to tailor the offer to their needs. It might not need to be as rich as a prospect offer but it needs to be relevant and compelling.
4. Evaluate business case
Not all customers are created equally. Some are high margin, some aren’t. You may want to focus on the higher value customers to start. Do the math and develop targeting strategies that are clear winners. As an FYI, we see response rates on these sorts of efforts range from high single digits into the double digits. Some testing will help you narrow in on the appropriate segments and individuals based on value.
If you are looking for help to develop a churn reduction strategy, feel free to reach out.