Customer churn. If you haven’t heard the term before, it refers to the upheaval that happens when existing customers end their relationship with your business. In other words, it’s the opposite of customer retention.
No company wants a high rate of churn — it means their sales department is working hard to acquire new customers while the hard-won customers of a year ago are leaving. That’s not good for business. According to the Harvard Business Review, acquiring a new customer is between five to 25 times more expensive than retaining an existing customer.
Your company spent a lot of time and money to get your current customers. So how do you keep them from leaving?
Here’s the short answer: Teach them.
The slightly longer answer: why customers leave
While there are many factors that contribute to churn, one of the biggest reasons customers take off is poor customer experience. If a company doesn’t take the time to engage its customers well, it can kiss those customers goodbye in less than a year.
According to Harvard Business Review, by the time you see an increase in churn, the damage has already been done. It takes about six to eight months from the time you disappointed a customer for the churn rate to increase. So if you’re responding to retention rates when you see them dip, you’re six months too late.
You also might not know who your unhappy customers are. According to analyst Esteban Kolsky, founder of ThinkJar, only one in 26 unhappy customers will complain to the company (although 13 percent will complain to others about the company, in person and online). The rest of your discontents will simply leave.
That’s why you must be proactive when you’re designing customer learning, anticipating your customers’ needs and listening to what they want.
Engaging your customers by teaching them
Your customers want to be engaged. A recent study by Five9 found that 95 percent of consumers said a positive customer service experience makes them want to stay with a company.
Customer education is one of the best kinds of engagement — you’re investing in your clients’ success with your product. Take onboarding, for example. When you engage with your customers at the beginning of their relationship with you, you’re accomplishing a few things. You’re:
- Teaching them how to get the most out of your product — Rather than just setting your clients loose with your product and letting them figure it out on their own, you’re showing them the ropes, and teaching them how to get started quickly and effectively.
- Heading off potential customer service calls — Every time a client contacts customer service with a problem, that costs you money, and most likely causes your customers some degree of frustration. By answering frequently asked questions in an onboarding course (rather than stashing those questions somewhere on your site and hoping your customers find them) you can save everyone time and frustration, and keep the customer service lines open for more complex problems.
- Setting the tone for the rest of your relationship — You’re no longer just a vendor. Now you’re a teacher as well. By opening your customer relationship with your clients with an onboarding course, you’re establishing yourself as the expert when it comes to your solution. You’re also managing their expectations. If their relationship with you started with learning, they can expect more learning will be coming later in the relationship.
Any training that follows can be tailored to your product — such as micro-learning associated with the release of new features and upgrades — or courses synced with the customer’s journey to help you up or cross-sell. Or maybe you release learning every once in a while to simply share tips, tricks, or hacks. Whatever approach you decide on, the important thing is that you’re engaging your customers regularly and giving them information that’s useful for them.
If your customer training game is on point, your customers are likely to repay you with loyalty. According to a study by the Technology Services Industry Association, 92 percent of software subscribers who have been trained renew their subscriptions and 64 percent of trained customers use those products more after they’ve been trained.
An educated customer is an engaged customer is a happy customer
Loyal, happy customers are great for business.
They often make more than the initial purchase, and in the case of SaaS companies, which offer monthly subscriptions (and often suffer a high churn rate as a result), happy customers keep renewing their subscriptions, so you want to keep them around. In fact, Bain & Company found that improving customer retention rates by just 5 percent can increase profits by 25 to 95 percent.
But to keep customers happy, you need to tend to them. Teaching them is one way to make sure their needs are met, they know what they need to know about your product or service, and that you’re regularly engaging them.