How to Reduce Churn by Delighting Existing Customers

May 30, 2018

whole brain marketing blog author


Posted by Laura Sheptoski

customersuccessWhat’s the main driver of business growth and sustainability for manufacturers? Is it the latest technology? Product innovation? Improved processes and efficiencies? Yes, these can all contribute to improved margins and market share. The number one factor, however, is something right in front of your nose: existing customers.

“Customer churn” refers to the number of customers that leave in a given time period, and it can have serious effects on your bottom line. Some organizations look at churn as inevitable and, yes, every business will lose some customers over time. But there are ways to minimize churn through strategic nurturing campaigns, engagement initiatives and attentive service.

Let’s take a look at the real impact of churn on businesses, plus some practical tips for using inbound marketing to help ensure customers keep coming back for more.

Calculating Churn and Its Impact

Some organizations simply look at how many customers are lost to calculate churn. In addition, some companies include any reduction in existing customers’ monthly spending. Quantifying churn based on actual revenue loss is a much more accurate reflection of the impact it has on your bottom line.

For example, if you start off with 100 customers and lose five during a quarter, you have a 5% churn rate. However, those figures don’t tell you much until you look at the actual dollars those customers spent. I’d rather have a 5% churn rate of infrequent, low-volume customers than a 2% rate that included my best and most profitable clientele.

Not only is it better to keep existing customers; the most profitable businesses know how to leverage data to increase their customers’ monthly spends. If you can upsell even a portion of your existing customers, it can have a major impact on your profitability. In fact, it’s estimated that 80% of an organization’s future revenue will likely come from 20% of its current customers, according to Gartner.

Ideally, your company should reduce churn while increasing recurring revenue. With the right approach, it’s not as unattainable as one might think. Consider these five inbound marketing methodologies for reducing churn and upselling existing customers.

1. Engage

We’ve all heard about “service after the sale.” This not only goes for customer service reps; it also applies to marketing. As part of an inbound marketing approach, you will have created several campaigns to attract customers through your relevant blog posts, email sends, advanced content, social posts and more. Once a deal closes, it’s important to keep the conversation going.

According to HubSpot, the pioneer of inbound marketing, delighting customers requires four pillars:

  • Solve problems
  • Be helpful
  • Achieve goals
  • Be enthusiastic

Strategically target communications with existing customers to keep them engaged, and track metrics to ensure you’re providing them with the content they want when they want it.

2. Educate

As part of your engagement strategy, it’s important to continue providing insights after the sale. It’s tempting to jump right to promoting the next upsell, but customers need to be educated on those opportunities first without feeling like they’re being pushed on them.

Emphasize ways your customers can reduce costs, increase productivity or improve quality. Since you’ve already gathered their contact information and can track their engagement with your content and email campaigns through marketing automation software, there’s no need to gate this helpful content. Make it easy for them to consume what you have to offer, and upsell when the time is right.

3. Define and Target

While every customer is valuable, it’s important to spend the majority of your efforts on delighting customers who represent your greatest long-term profit potential. Defining and identifying those customers will help you know where to spend your time. From the beginning, your inbound strategy should target your best prospects so, ideally, the customers you acquire over time will be of higher quality.

While catering to these higher impact customers is important, don’t forget the importance of good old-fashioned loyalty. Even if a few particular customers don’t blow the doors off your revenue, their loyalty and potential influence in the industry are worth more than just the number on the bottom of an invoice.

4. Pay Attention

What are your customers saying? What do they really think about your company and products? Do they have complaints? You can’t know if you don’t ask. Use email surveys to gauge customer satisfaction and understand their needs. Monitor social media and other platforms that might be used by your customer base.

And, while digital engagement is a crucial part of delighting customers, don’t forget to include personal follow-up through phone calls or face-to-face meetings. This helps build rapport and relationship. Keep in mind, however, that customers may feel more comfortable providing not-so-positive feedback through an online survey. Combining both approaches provides the best of both worlds.

5. Flaunt

A little self promotion isn’t a bad thing. While customers don’t want to feel “sold to,” you should make sure they understand your capabilities and the benefits your company offers. Set up workflows to identify your customers’ interests and activities and send gentle reminders of related products or services that might help them take the next steps toward additional purchases.

When customers feel nurtured and cared for after the sale, they’re more likely to continue their business relationships with you and become loyal, long-term promoters of your brand. Since the probability of selling to an existing customer is 60-70%, and only 5-20% for new prospects, according to Marketing Metrics, reducing churn and creating upsell opportunities could have the greatest potential ROI.

Of course, making the connection between your inbound marketing strategy and closing the deal requires a strong relationship between Marketing and Sales. Aligning the two departments is crucial, so check out our free guide below on how to build consensus in Sales and Marketing around an inbound approach.

A Guided Tour of Marketing & Sales Service Level Agreements



Topics: Inbound Marketing



whole brain marketing blog author
Written by Laura Sheptoski

Laura is a detail-oriented consultant and project manager, with a background in public relations, social media engagement, and client content creation. Prior to her time at Weidert Group, Laura managed PR for an industrial services company, and maintains a strong focus on earned media within our inbound marketing programs.

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