Do you remember the movie Say Anything?
John Cusack, fresh-faced and not yet known for breaking the fourth wall, deprives Ione Skye of some much-needed sleep by holding a boombox -- no easy feat, as they once rivaled the weight of Rhode Island -- over his head, serenading her with Peter Gabriel?
Cusack’s questionable attachment issues aside, business owners everywhere can relate to those desperate measures when they start losing customers.
I mean, you’d personally be willing to belt out In Your Eyes if it meant recovering lost revenue, right?
Especially if that lost revenue is because your members are leaving your program, cutting into your recurring income and leaving you bereft of both their company and currency.
Here’s the good news:
You can hold off on practicing your ballads, because we’ve put together four easy strategies to help you ward off member churn and keep your members in pocket.
Though, we should talk about that term before we dive in -- what exactly is “churn”?
What is customer churn?
If you’re thinking that churn should be reserved for butter and corn, I couldn’t agree more. Unfortunately, this word has a different meaning in business: it refers to the loss of customers.
And, just as regrettably, it occurs naturally in every business. Similar to how friendships change throughout your life -- some endure, but most will phase out with major milestones -- customers tend to leave businesses and move on to other pastures as the seasons turn.
But while you can’t avoid it altogether, you can take steps to improve your customer retention rate.
Chiefly, by identifying if your customers are leaving due to one of the following three reasons -- all of which we’ll address today -- or some other cause:
Reducing customer churn has become such a prominent focus for business owners (and for a good reason) that some are calling customer retention the new marketing.
“The end goal is no longer to simply convert a lead into a customer. It’s about maximizing the lifetime value of loyal customers who will come back again and again.”
As for calculating your churn rate, it’s simple. Choose a time period. Let’s say you choose to calculate your churn rate over the month.
Take the number of customers you start with at the beginning of the month and subtract the number of customers you have at the end of the month.
Since you’re measuring your customer churn rate and not acquisition, don’t include any new customers in your calculations -- just the ones that were there from beginning to end.
Then, divide that number by the first number (how many customers you had at the beginning).
To put this in context, let’s use a membership program as an example.
Let’s say Krishna Teja’s “Complete Salesforce Platform & Lightning Experience Training“ program starts out with 45 members at the beginning of the month.
Over the course of the month, he loses three members.
So his churn rate equation would look like this:
(45-42)/45 = 0.06
To turn that into a percentage, we just multiply it by 100, which gives us a churn rate of 6.67%.
Not too bad, but if he’s not adding new customers to the mix, that drain can put a serious crimp on his income.
Which is where the rest of this articles come in. Now that we have churn rate covered, let’s talk about how to put a stop to it -- or at least put up a good fight.
#1. Send welcome emails that actually help
If you remember, the leading cause to customer churn was poor onboarding. That means when a new customer signed up, they weren’t welcomed into the fold with the tools they needed to achieve their goals, so they -- reasonably -- went and found another tool.
Fortunately, you can flip the script and give your onboarding some much-needed grease without shaking hands with all of your members individually. A well-designed onboarding email campaign is automated, and it’s one people are receptive to.
How receptive? 50% of welcome emails are opened.
Which is a significant uptick from other emails, all but dwarfing regular newsletters in terms of reception.
Which is great news for someone also trying to sell online courses and digital downloads.
Welcome email series are so effective that they can increase your repeat purchase rate -- which means keep your customers from churning -- by up to 70%, as Peak Design discovered.
So if you want your new customers to stick around, give them a warm welcome, and make it a multi-step process with a series of nurturing emails to keep them primed and engaged.
And, no matter what, make sure your welcome email is giving your customer the tools they need to make their new membership work for them -- like the sign-in link, help documentation, and a line to customer support.
Google, unsurprisingly, is a prime example of doing the welcome email well.
Evernote does a great job, too. Again, we see a sign-in link, alongside some value propositions, help documentation, and a link to their support channels.
Which just goes to prove that a strong welcome email doesn’t have to be complicated, it just has to be helpful.
Do that, and you’re already fighting the good fight against the number one cause of customer churn.
Then take it a step further and make your membership dynamic.