Este artículo tiene:
- 1 What is the churn rate?
- 2 Why is it important to calculate Churn rate?
- 3 Is it possible to have no Churn Rate in your business?
- 4 How to reduce the Churn Rate
In the online world, getting subscribers is quite a feat. However, once you have made all the effort to achieve such a noble goal, the satisfaction you feel is indescribable. In fact, it can be said that the amount of subscribers represents the success or failure of your brand.
Now, it is common that after capturing a number of customers, they leave or abandon the website. This process is called Churn Rate. It is natural for you to ask yourself: What happened, how can you prevent subscribers from abandoning your website? Well, it is impossible to prevent some of them from leaving, however, I will give you some tips to reduce the churn rate.
What is the churn rate?
This term refers to the rate or percentage of customers who cancel their subscriptions, i.e. they no longer wish to continue using a company’s services. In the digital world, it is common to have a certain number of “followers” these subscribe to the website and enjoy the content offered on it.
When these customers decide to leave, it is called Churn Rate. And obviously it’s an episode that no one wants to experience, but it happens regularly.
Why is it important to calculate Churn rate?
As I explained earlier, the success of a business is measured by how many customers or subscribers it has. So, if the company has a very high churn rate, it may mean that there is a problem that needs to be solved. In other words, I can safely say that the churn rate is like the thermometer that indicates that there is a fever.
The above is evidence, that just as a person must investigate the source of a high temperature (fever) in a similar way, if you want to be successful in the long run you must take the appropriate steps in order to find out the reason for that drop in subscribers.
But there is more, you must also know how to calculate the churn rate. Just as a damaged thermometer is not useful for measuring temperature, a bad calculation will not yield the real data of your situation.
However, it is important to note that measuring Churn is very simple. Although you can do it on a quarterly, semi-annual or even annual basis. It is best to do it on a monthly basis. The calculation is as follows:
If you have 120 subscribers in a month and 5 leave. You just multiply the 5 users who have unsubscribed by 100. And then divide the result by the total number of subscribers at the beginning of the month. This calculation gives us 4.17% that’s your churn rate for that month.
Regularly checking the number of churned customers allows you to take action to fine-tune your products or services. Detect failures in time, and stay on top.
Is it possible to have no Churn Rate in your business?
The truth is that it would be the ideal dream of any good entrepreneur. However, I want to be totally honest with you, it is impossible to prevent some customers from leaving. In fact, chances are that you yourself have been among those who have cancelled a subscription at some point. So, it’s only natural that someone will leave.
Now, what you can do is to keep such incidents at bay. I’ll explain, if a person decides to leave, you have to respect that decision. Maybe their interests have changed. It may also be that the service he has been enjoying is no longer necessary for him. So you should not feel bad about these cases.
However, you should not let your guard down, it is very important to know the reasons why you have a Churn Rate. Otherwise, you may develop a churn rate that is too high or dangerous to your revenue.
For example What type of customers are leaving? If you’re offering a service plan at different price points, and those on the highest plan are the ones who are dropping out, it can be a big loss. But knowing this information helps you take some corrective action.
How to reduce the Churn Rate
This is the most important question of this post. Well, following the illustration of a patient with a fever, once you have measured the temperature and the cause of the infection it is time to counteract it.
Similarly, after you have measured the Churn Rate, it is necessary to determine the cause of this cancellation. For this reason, you must take into account several factors in order to keep the Churn Rate at bay.
Determine the cause of the churn rate
Although doing this type of research can be a big challenge, it is necessary to do it, as this will help you to improve, in case the reason is dissatisfaction on your part. It has been very useful to place a small survey before accepting the Churn Rate. Their response may highlight some of your brand’s weaknesses
Manage a Customer Success
This step is vital. For once you’ve determined why the customer is leaving, you need to do your part, i.e. attack any weaknesses. Remember the illustration of the patient with a fever?
Well, just as a person who is sick needs to take medicine to get relief, so to do you need to attack the cause with the help of a team in this area. But you can do more. You can anticipate some problems and strive to keep the customer satisfied.
Segmenting customers is an excellent strategy, as it allows you to adapt to the needs of each particular segment. This greatly reduces the number of dissatisfied consumers.
Upgrade and improve
It’s true that sometimes customers’ interests change over time, but also, the world evolves and that contributes to the change of interest. For such a reason, don’t disregard updating or rebranding.
At the same time, don’t saturate your clientele with junk promotions. Remember that can be annoying. Rather, keep the quality.
Communication and customer service
Entrepreneurs boast of offering the best customer service to their “distinguished” customers, but the truth is, at the time of an inconvenience, there is not enough staff to respond immediately and politely.
Ensure that your brand is identified by providing a solution and an excellent customer experience. Also, don’t save money by not placing qualified personnel to provide customer advice.
Deliver what you promise
This point is vitally important. Imagine you just subscribed to a channel where you were told there would be new movies, and after signing up it turned out that the films were from years past. Would you stay? It all depends on what was the reason you signed up.
But in general, not meeting customer expectations by resorting to outright deception is very annoying and insulting. For that reason, I recommend that you avoid dishonesty at all costs. Rather, stick to what you have promoted.
For example, if you offered a certain amount of free content or an offer, you must deliver without fail. Otherwise the customer will not only cancel their subscription, but will speak out against you, thereby damaging your image.