Customer Retention: 7 Tips to Keep Them (and Reduce Churn)

This is Post No. 18 in  How to Start a Business  Series.

To grow a business needs to acquire customers.

Once you earn customers, it is important to keep them.

For a startup it is important to keep churn (the rate at which customers leave)  low.

(Churn rate is a crucial factor for any business, and is usually used in the context of a startup with a subscriber-driven model.  It means percentage of customer who leave a service during a given period.)

A low churn rate is good for your service. You ensure that it is low by making sure that customers do not leave.

Here is how you can keep customers with your business.

1. Make Sure Your Customers Use Your Product/Service.

A customer not using your product/service will leave you eventually. Use lifecycle email marketing to make the customer use your products. If you run an app, Intercom is a good service that you can use for it.

Always offer to help them set up and get started with your product. Offer training wherever it is required.

2. Do Not Send Too Many Emails.

Do not spam your customers by sending too many emails to your customers for upgrades etc. (Also do not make the rookie mistake of not sending any emails.) Send emails with the intent of sharing value – not just sales pitches.

3. Offer Special Deals to Your Paying Customers.

You can offer incentive – like a reduced price to – your monthly paying customers  to convert them to an annual plan.  This will save the money and make sure that do not leave in middle of subscription period.

4. Offer Annual Plans (Only or With Incentives Over Monthly Plan).

This works well for established players with an existing customer base.

5. Surprise/ Delight Customers on Regular Basis.

Send them handwritten birthday cards. Here is how CDBaby served its customers back in the day.

6. Do Not Abandon Them Once You Make the Sale.

Stay in touch, ask for their opinion about your website – or a new design. Invite them to the launch of a new store close to them. Ask them about their level of satisfaction with your service. Check out Project Happiness by AppSumo – meant to measure customer happiness.

7. Make Sure That It Is Really Easy to Cancel Subscription.

A bad product is not always the reason that customer leave. May be the customer did not find your product to be what she thought it will be or any other reason like less money on card. Make it easy to cancel. So that people do not badmouth you for your clumsy cancellation process.

Do this and you will reduce churn, keep your customers longer and make more profits.

Action for the day: Choose one customer retention strategy from the ones listed above and use it in your startup within next 7 days.

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