Avoiding Customer Attrition

Is there a difference between customer attrition and churn? The answer to that is mostly a no, but slightly a yes in the sense that churn tends to be the term only used with SaaS, or at most, with specifically service based subscription industries with the same sets of business concerns.

But, at the heart of it, customer attrition and churn mean the same thing when you strip away context. Usually, I complain of a lack of context making a definition more difficult, but in this case, it’s taking it away that has helped. That’s ironic in a poetic way.

What Is It:

Well, attrition is basically the loss, over time, of loyal, repeat customers due to a loss of interest on their behalf, being swept up by competition, dissatisfaction with some aspect of your business or product/service, or their feeling they no longer need your or can justify the cost of you.

It can also, quite often, include a decrease of new customer acquisition as well, though that does tend to bring in its own set of unique problems that probably deserve their own piece to talk about later, if you ask me. So, yeah, it really is basically the same as churn, if you were familiar with that going in.

If not, you’re familiar with both terms now, and that’s a good thing.

Why It Sucks:

Well, do I really have to say why this is a bad thing? Loss of repeat customers or a drop in incoming new customers, or … god help you … both at the same time means a loss of revenue, of presence and market value, among a number of other things.

But, it also indicates, above all else, that something is wrong. Something you must fix if you wish to carry on as you once did.

Ways to Fight It:

Keeping your marketing campaigns fresh is the biggest step to take right out of the gate. Never let a campaign last more than two months, and during that two months, don’t grind it raw and make customers sick of hearing about it.

Keep it short and always changing. This keeps re-hooking interest of existing and new customers, as well as keeping them from becoming directly bored of you.

Along with this, keeping prices competitive is obviously a way to abate those snatched up by cheaper competition, or lost due to price being unmanageable.

Another thing to consider is incentivizing your customers to stick around by offering them loyalty discounts, bonuses or discounts for bringing in a friend, and other tried but true ways to reward loyalty and word of mouth marketing. This one is a little costly, but if you don’t know incentive marketing works by now, then you’re in the wrong field anyhow.

Finally, keeping tabs on competitors and responding to any strategy they take that may one up you, again, is an obvious but important way to combat this. You’ve got ennui combatted and you’ve got price problems down, now just be ready to keep those competitors from muscling in on your action.

If you do these things, you’ll see a drastic reduction in customer attrition. If not, then I do have a final suggestion, which is to take a long hard look at your customer support and service departments.

cx

Matthew Thomas
Matthew is the Lead Author & Editor of CXperience Blog. Matthew established the CXperience blog to create a source for news and discussion about some of the issues, challenges, news, and ideas relating to Customer Experience.
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