Most businesses want to attract new customers but forget that the bigger win, in the long run, is keeping the ones you already have. Your customer churn rate has a direct impact on your customer’s lifetime value and the ability to grow your business. Say your customer churn rate is around the same percentage as the amount of business you’re bringing in; although these costs may break even, a number of costs going into marketing and customer acquisition will offset this and lead to you killing your bottom line. Killing off your customer churn rate is important, and mystery shopping is a great tool to help you do so.
What is customer churning?
When a customer (subscriber, user, client, etc.) ceases their relationship with the company they are also churning. Companies classify a customer as churned once a specific team has elapsed since their last interaction. Before you can calculate your lifetime customer value you must know your customer churn rate. This number can be represented in a few ways:
- Percent of customers lost
- Value of recurring business lost
- Percent of recurring value lost
Why do customers churn?
Any industry (including all the ones we work in) that is service-based and has ongoing relationships with their customers need to ensure customers are happy and that they’re providing exceptional customer service. Here are four of the main reasons customers tend to churn:
- Bad customer service
- Bad onboarding
- Lack of ongoing customer success
- Natural causes
What you can do to reduce customer churning
There are many tactics that you can use to reduce customer churn, and in doing so customer lifetime value is increased and your business grows.
- Continually add value to your product
- Know your competitive advantage and utilize it
- Listen to your customers to learn what they do and don’t like about what you provide
- Use mystery shopping to analyze both internal and external environments
- Identify ‘at risk’ customers using key indicators
- Track customer’s lifetime value of marketing channels
How mystery shopping can help
Although finding ways to manage your customer churn rate can be done through taking a step back and strategizing based on what you have in front of you, having an external perspective is just as important. A secret shopper audit can provide you with a customer’s experience of your business along with a professional’s understanding of the industry. The compiled data can be used to find what specific touch points during the customer’s experience may result in an increased churn rate. Braymark provides a suite of services specifically designed to analyze and critique hospitality industries. We provide the information you need to enhance guest experiences and reduce your customer churn rates.