There are a number of reasons why customers may decide to abandon your product or service. But if you don't find out why—and fast—you'll never know how to keep new customers sticking around in the future. That's why we asked eight successful entrepreneurs from Young Entrepreneur Council the following question:
Q. My customer retention rate is declining. What’s the first thing I should do?
1. Assess the Situation
Ask yourself what their reasons are for leaving. Is your service or product frustrating or difficult to use? Is it too expensive? Is there a superior alternative out there? Then, create an approach to address the most common concerns. You can learn a lot from a simple, honest conversation or email exchange with a customer who is leaving. —Volkan Okay Yazici, Stonexchange
2. Pick Up the Phone
In my businesses, I've found that picking up the phone and calling clients goes a very long way--it trumps email any day of the week. Ask people how things are going, what you can do to help, and what problem areas they have that need your attention. You'll learn so much about your product offering and company in a very short period of time, and customers will really appreciate the one-on-one attention. —Alex Miller, Upgraded Points
3. Check Your Data
Look at your available data to see when, where, and why the decline happened so you can pinpoint a particular set of actions or communications that put customers off. While you can ask them why they decided to leave, it's important to sift through your data for any patterns in the decline and better understand the problem from inside the organization. —Angela Ruth, Due
4. Find Out if It's a Product, Customer Service, or Sales Problem
Are you attracting the wrong types of customers? Are you unable to retain good customers because your product inadequately meets their needs? Or is there a fundamental problem with your approach to customer service? Before you start interrogating customers about why they are abandoning ship, find out first if this is an internal problem you can solve quietly. —Firas Kittaneh, Amerisleep
5. Reward Customers for Completing Exit Interviews
Incentivize past customers to complete exit interviews or surveys by offering gift cards or raffle entries in exchange. When someone makes a decision to leave, it's usually final. But figuring out why they left and fixing the problem can prevent other customers from leaving. Consider the "price" of getting people to do exit interviews/surveys as an investment in keeping your current and future clients. —Dave Nevogt, Hubstaff.com
6. Survey, Discuss, and Take Action
Use periodic customer satisfaction surveys and discussions to find the reasons behind your churn rates. Hire account managers that have experience with account/crisis management. Set realistic expectations on what you are capable of doing so that you have the ability to wow them. Under-promise and over-deliver. —Deepti Sharma Kapur, FoodtoEat
7. Study Trends
Using analytics and other data sources, look for trends to determine the cause. Oftentimes, numbers will share the story behind the decrease in customer retention. Then perform an audit of your current processes, products, and services to identify how you can improve. This includes competitors since they may offer the same thing for less, or something better. —Marcela De Vivo, Brilliance
8. Turn Off Marketing Spend
While it's true that you should talk to customers to understand why they're leaving, there's a step I'd probably take before that, which is to dial down or turn off marketing spend. Most likely, you're spending with a certain customer lifetime value calculation, and now that's changing. So don't overspend. —Fan Bi, Blank Label
