Have customers ever stopped doing business with your company? Unless they posted all over social media, they probably departed silently, and you may not have even known about it. A study by NewVoiceMedia showed that 51% of customers would never do business with a company again after one negative experience. Just one? That’s a little shocking.
It’s also shocking when you learn that it costs between 5 and 25 times more to acquire a new customer than retain an existing one. Wow. So what can companies do to keep customers happy, reduce customer churn and in turn, increase profitability?
An Adweek webinar with Tinuiti and Wrike described some of the top reasons for customer churn and ways to address the problem by taking action. Some of those actions are a little unexpected.
For instance, do you automatically think of employee retention when you think about customer retention? Maybe not, but you should. As Cristina Bravo Olmo, Vice President of Marketing at Wrike, said, “Employee churn is a key factor in customer churn. Personally, I want consistency, and I want to know my agency team understands my business and needs. That doesn’t happen when there’s a new team starting every few months.”
Sure, there are lots of reasons employees leave their job. But you can take steps to retain workers by improving communication, better managing workload, and encouraging ways to reduce stress. Satisfied employees typically provide better customer service, leading to higher rates of customer satisfaction. And satisfied customers tend to continue working with a company they like — one of your ultimate goals.
Reasons for customer churn and how to avoid it
Wrike conducted a survey of professional services providers in early 2019 that focused on the challenges teams face and why customers stop working with a company. The results showed the top reasons for customer churn include communication challenges, projects going over budget or missing deadlines, and the aforementioned team turnover.
The webinar also shared 3 areas of opportunity companies can focus on to address and (hopefully) avoid customer churn. Those are:
- Project planning and resource allocation
- Aligning processes that optimize collaboration
- Improving visibility to increase clarity, enhance communication, and reduce employee burnout
“As a project develops, it’s critical that communication and collaboration keep pace.” – Cristina Bravo Olmo, Wrike
These are not simple activities that guarantee success, but any company that truly wants to improve its customer experience can implement them. Each area can reduce customer churn by itself, but when combined, they are magnitudes more effective.
“Proactivity is one of our client services bedrocks,” said Katy Lucey of Tinuiti. “We are always looking to give clients visibility into performance and projects outside of our weekly calls, before they can even think to ask. We send daily updates on new projects and weekly recaps for project status. It helps keep everyone clear and on the same page.”
Protect your bottom line
There’s much more information in the webinar, including a discussion of information silos and best practices in resource allocation, collaboration, project planning, and visibility. To learn more about how to maintain positive customer and employee relationships, safeguard your bottom line, and reduce customer churn, check out the webinar:
Wrike is a collaborative work management tool that was designed to improve collaboration, enhance visibility, and streamline communication — all things that can help reduce customer churn. Start your free 14-day trial today.