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Turn churn to return: 4 tips for reactivating churned customers

Here’s what you need to know.

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Customer churn — also called customer attrition, customer defection, and customer turnover — refers to the percentage of customers who call it quits on using your products or services over a certain time period. Churn analysis shows that churn is bad for companies because, rather than focusing on growth, they must instead find new customers to replace the ones who left. That’s particularly bad news because seeking out new customers is a lot more expensive than retaining existing ones. To put it another way, churn means spending more cash just to stay in the same place you were.

However, if there is a bright spot to be found within churn it’s that it doesn’t have to be permanent. If you have a nasty romantic breakup with a person, it likely means they never want to hear from you again. But if a customer stops using your service, that doesn’t have to mean the end of your working relationship. It just means the end at that moment in time. 

While it’s important to realize that, just like a romantic relationship, maybe your churned customer just isn’t into you, in other cases, it’s possible to win back lapsed customers with the right strategy. Here are four suggestions.

Try to make things right

If a former customer is part of your churn rate, that tells you two things: Firstly, that they once considered your product to be of interest and, secondly, that something happened which caused them to leave. This means that, if you can correct that churn-inciting incident, they may again be interested in doing business with you. Customers want to feel valued and respected, so a surprising number may respond if you reach out trying to better understand what went wrong. 

Companies should try and know their customers — and that includes ex-customers. If you made a mistake that caused them to leave, then offering a token of apology and appreciation may persuade them to give you another shot. For example, Uber’s surge pricing strategy has previously cost it customers who were upset about the variable pricing. Uber invited returnees a free ride if they came back. This greatly helped improve the perception of Uber. Understanding where things went wrong may also teach valuable lessons you can apply to customers in the future.

It’s goodbye… for now

If you’re a movie fan who unsubscribes to a movie streaming service, it’s probably not because you’ve decided you no longer like movies. It’s because nothing on the streaming service is grabbing you enough to pay out $X per month to keep subscribing. With this in mind, businesses should always keep former customers in mind when it comes to new products that may appeal to them. 

Because you have customers’ purchase history, you can target them with messages when something arrives on your platform that may be of genuine interest to them. (You must make sure that this is likely to be the case, of course, to ensure that you’re not spamming someone who has walked away because they’re not impressed by your offerings.) If you get a good fit between new product and lapsed customer, this could be a great reactivation strategy. A strong, well-matched recommendation may also cut through a noisy, crowded inbox better than the discount messages businesses typically use to try and hook churned customers. And it doesn’t cost you as much, either.

Have you considered discounts?

Of course, discounts do work — which is why businesses continue to use them. Discount strategies typically involve starting at a relatively small discount, then offering comparatively large ones at regular intervals. In many cases, customers won’t actively dislike a service prior to quitting; they may simply find that it costs them too much at that juncture in time. 

If you’re able to hook them back in at a discount rate, you may remind them of what it is that they liked about your product offering to begin with. Especially once they see everything you’ve added in the time since they left…

Always be improving

ABC — or “Always Be Closing” — is the salesperson’s mantra, referring to the idea that they should always be looking to close a deal with customers. But looking inward is also important. In this case, that means looking to see which services can be improved. After all, if one or two customers leave, that could be on them. However, if you have a higher than expected amount of customer churn this may be because you are failing to address some customer need or pain point. Working out what those pain points are — through analytics, surveys, and polls, among other measures — can help to improve your service and ward off potential rivals. As well as, of course, winning back former customers.

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