With acquisition costs spiraling, companies are increasing their focus on customer retention strategies. Getting inside the minds of the three key groups of customers most likely to churn – the dissatisfied, the vulnerable and the disengaged – is a vital aspect of such efforts.
Dissatisfied customers feel a business did not provide a product or service as expected. As well as the loss of their business, these customers could negatively influence others, especially in the era of social media.
A recent survey revealed that 76% of customers who churned after experiencing poor service admitted sharing their disappointment with others. 70% discussed the company negatively with friends, family or colleagues, 18% shared it on their social media channels, 12% posted on the company’s official social media channel or website, and 4% even discussed it with the media.
To retain these customers, companies should empower employees to react appropriately, authorizing them to resolve problems immediately to avoid escalation. They must also invest in proactive strategies to minimize customer dissatisfaction, collecting customer feedback and carrying out data analysis to determine whether the issue is a recurring one, and if so, look for the root cause and fix it.
Vulnerable customers are those who would gladly move to a competitor if they were offered a better deal. One third of all customers have zero brand preference and can be easily seduced by a superior offering.
To improve retention rates, companies need to identify the key points in the customer journey when this group is most likely to churn and to engage them with incentives. Increasing personalization efforts, finding new ways to emotionally connect with customers, and offering a range of connected products and services are effective strategies that create stickier relationships.
Disengaged customers are those who do not regularly use a company’s products or services. They can be difficult to detect because they often have not had a negative experience; they have just become inactive and have fallen off the radar. A major investigation of customer churn found that many respondents churned passively, after hearing about or being offered a better deal from a competitor. Retaining these customers means catching them at just the right time. For example, short product tutorials can reduce churn by 6%.
Promoting regular use of products or services through personalization is also a proven strategy. According to a Salesforce study of personalization, brands that effectively incorporate customized experiences into the customer journey experience greater returns and higher retention rates.
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