9 Tips to Reduce Customer Churn

Izzy

June 15, 2019
4 MIN READ

When it comes to lead management and CRM, the churn rate of a given company’s database is an important indicator of how healthy is their digital marketing strategy and sales process.

In the case of B2B marketing and sales, especially in Software as a Service (SaaS) companies, database health and churn rate reduction is a priority.

  • With the improved access to information, “customers are more transient, and it is easier and less costly for them to switch between competitors,” says Fred Wiersema, from Pennsylvania State University.
  • Retention is crucial. B2B customers are fewer in numbers but make larger, more expensive and more frequent purchases.
  • SaaS is mostly subscription based. Companies require a recurring revenue stream, and they are more sensitive to customer satisfaction, according to academics from Radford University.

But what is this churn rate we’re talking about?

Basically, churn is the measure of contacts you lose as a result of a send, says HubSpot.

Imagine you’re the newly appointed CMO of a SaaS company, and you receive a marketing & sales portfolio with 4,600 subscribers to your blogs and email campaigns.

At the end of the year, your numbers are a shock: you closed the year with 3,500 subscribers.

That’s a 24% churn rate. It means that 1 out of 4 people on your database chose not to hear from you again. HubSpot says that an average contact database decay amounts to  22.5% a year.  

Is your boss mad? No, he’s rather disappointed. But he puts you on the spot with a simple question:

“What are you going to do about it?” 

Well? What’s your game plan?

Analyze your past year’s database, in detail

Looking at the large numbers won’t help at all. You’ll need to dive into the specifics of your churn rates.

  • Was there a period in the year where that churn spiked? What type of information were you sending then?
  • Have you segmented your database? What customer segments show higher churn rates? What type of content were you sending them?
  • What specific campaigns have a higher churn?

Figure out the reasons of the churn

There are three ways you can lose contacts:

  • When someone opts out or unsubscribes from your contact lists.
  • When their email address bounces.
  • When they mark your message as spam.

1. When people unsubscribe, ask yourself

  • Which segment is unsubscribing the most?
  • What type of content were they receiving?
  • How were your blogs or emails optimized?

2. When you see email bounces, you’d better review…

  • If it’s a hard bounce, it means the email is wrong or no longer exists. So, double check the email address or just remove it from the database.

3. When you’re marked as spam...

You have a serious problem. You’re doing something wrong.

  • You may be linking to something the user or the email server doesn’t like and considers offensive or illegal. So double check your content and your email links.
  • You’re lacking text content on your email. This normally happens when someone sends information embedded as an image, but it fails to be optimized in text mode. For instance, with an alt text embedded on the image’s metadata.
  • Your email copy looks like spam content. People may have previously marked similar texts as spam, so revise how you’re writing your emails and blogs.
  • The copy is filled with spelling errors. Well, you know what to do. Proofread!

Watch your email open and click rates

You may think that a good delivery rate is enough to say “job well done.” But it’s not.

There may be people there who haven’t clicked on your emails for a long time. Worse, they may not be opening them either.

These are contacts who are unengaged, and may eventually unsubscribe or, worse again, get tired of you and mark you as spam. Make sure you keep them on track.

Re-engage your sleeping leads

When you find out that people are simply not responding, you may need to take some serious action. What kind of contact are they?

  • Are they a qualified lead?
  • A current customer?
  • A former customer?

Make sure you have figured that out, so you can start a re-engagement campaign to simply say: “We’ve missed you. Is everything OK with you? Is the content we’re sending you relevant?”.

Make sure you don’t send the same copy to leads, customers or former customers.

  • Leads may need more time before deciding on a purchase. Or their CFO may have cut their funds for a new SaaS. So, make yourself available to them
  • Customers may be taking for granted that after purchase, they don’t need you.

How do you delight customers?

Make sure you’re sending them relevant information and your company is available for any post-sales advice. What’s more important, they may soon need to renew their subscription. Are they OK with your software or considering parting ways?

  • Former customers canceled your software subscription for a reason. Was it a budget problem? They went to the competition? They no longer need that solution? Is there something else you can do for them?

Optimize your content

Keyword optimization is not restricted to a search engine. 

  • Are there any topics that drive people off?
  • Do they have keywords in common?
  • How are you framing the subject line?

Perhaps your copy works for one segment, but not another one. Where is the content more relevant?

Make sure the content meets their needs

Imagine you’re a SaaS for doctors to optimize their appointments. But you have no doctors, nurses or anyone in health in your contact list. Are you converting patients instead? You need to change your content, fast.

Redesign your blogs and emails

Check where are your leads checking you out from.

  • Are they on a mobile phone?
  • Is your email copy mobile friendly?
  • Is your blog designed and written in a mobile friendly way?

Change your email marketing timing

For most of us, it would be just perfect to hit the “send” button and go home .  

Personally, there is a time of the day or evening where I’m most prone to checking my emails: when I drink my morning coffee, after lunchtime and before I get out of the office.

But people’s timing is different, depending on their preferences, working habits and, most importantly, their time zone. What time is it in Beijing?

Are you sending the right content at the appropriate time and frequency?  You’d better run some tests.

Personalize and segment the information you send

Some psychologists claim that people’s favorite word is their own name. Is yours?

Make sure that your communication addresses your leads particular information, as they put it on their sign-up form: their location, position, interests, etc.

That way, you can also segment your contact database to the stage of the buyer’s journey, their role within the company, or  the content preferences they may have placed on a form.

How is your churn rate? What are you doing to reduce it?

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Izzy

My name is Izzy and I am a co-founder of IDS, an award-winning HubSpot Solutions Partner. I lead our team of consultants who provide professional guidance to help businesses implement the HubSpot CRM platform migrate, integrate their tech stack to HubSpot to create a seamless environment for sales reps to use. There is nothing I love more than solving the challenges that come up when someone wants to migrate an old system or integrate their tech stack with HubSpot - it's like a puzzle!

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