For every business, there are two main concerns when it comes to growth; gaining new customers and maintaining your existing customer base.
Without fully focusing on both of these aspects of a business, the chances of failure are drastically increased. However many businesses focus on growing their customer base, without gaining feedback from their current customers or understanding how to retain their existing ones. Would you continue to poor water in to a leaky bucket?
Customer churn is highly detrimental to the overall growth of a business, as the churn rate (the percentage of customers who stop using the service) remains high. Essentially this would mean that whilst a business is gaining new customers, it’s also losing current customers – either at the same rate or even a higher rate in many instances.
This scenario means that both time and money are wasted in the process; any marketing budget used on gaining new customers is lost as soon as those customers stop using the product or service that the business provides. Really think carefully about customer acquisition until you’ve solved the problem of customer retention. Afterall, it costs around 5x more to acquire a new customer than it does to retain an existing one AND existing customers have a much higher propensity to spend more over time than a new one. Making sense?
There are various different tools that can be used to prevent and drastically reduce the number of customers who decide to discontinue using your business’s product or service. These tools are most commonly known as customer success tools – allowing you to analyse customer behaviour and optimize how you manage customers. This is great, and there are plenty of companies scuh as Gainsight and Optimove that do this really well. But, they don’t understand churn, which is arguably the most critical part of the customer success funnel – because no matter what you do to retain customers, some still leave. It is therefore imperative you use customer success tools that understand exactly why your existing customers are leaving.
The exact reasons why a customer may leave can vary dramatically, and the reasons are almost always beyond the human eye. Churnly complements the existing customer success tools you use, by focusing solely on the end of the funnel – spotting customers that may leave, weeks in advance so you can intervene and keep revenue in your company and grow faster.
If you’re running a subscription based software business, then there may be a wide range of reasons as to why your customers leave depending on the nature of your business. Customer success tools such as Churnly are built to show you exactly why your customers are leaving, based on enterprise level predictive modelling and AI (artificial intelligence). Churnly customers are therefore able to know in advance which customers are likely to leave and why, which in turn will save your business money and time, as well as maximising overall growth in the long term.