How to Gain Loyal Clients and Reduce Churn Rate|What Causes Client Churn|How to Calculate Churn|Reduce Churn and Increase Loyalty|Apple iPhone|ACE Digital Marketing|Sleeknote|MicroLogic Media


January 2, 2020

Growth and Productivity, Scaling Your Business 7 min read

How to Gain Loyal Clients and Reduce Churn Rate

All businesses have lost clients. Maybe you lost clients because they found a better deal somewhere else. Or maybe they weren’t pleased with your service. 

Whatever the reason, businesses must focus on retaining clients. As tempting as it to stay acquisition mode, this is not sustainable over the long term. This problem is client churn. It’s an inevitable part of life. 

But there are many steps you can take to both mitigate and prevent client churn. 

Let’s dive into this essential topic and check out key client churn strategies. 

What Causes Client Churn

What Causes Client Churn

No matter what you do, you can’t completely prevent client churn. There are too many things you can’t control. But even small steps can lead to significant improvements like: 

  • Increased revenue 
  • Higher upsell revenue 
  • Increased referral 
  • Higher client LTV
  • More client acquisition channels. 

Here are some of the leading causes of client churn: 

1. Poor onboarding

Onboarding is the process of familiarising new customers with your company and service. This gives your client the opportunity to engage with your services. Too many companies are happy to leave the customer to their own devices after they’ve wrapped up a sale.

Digital agencies cannot afford to do this.  Even companies that retail simple products like clothes include washing and care instructions.

Digital agency services are much more complex. And most people have little experience with them. So your clients need access to assistance. Let them have plenty of resources about your services, how they use them, and where they can go for help.

What’s a Client Success Team? 

In the digital world, you often see the term “client success team” instead of “client service.” The reason for this is simple. Client service helps you when something goes wrong. 

Client success is there to make things always go right. Client service is reactive, while client success is proactive. Focusing on client success is the key to eliminating churn. 

2. Lack of relationship building 

Healthy relationships with clients are essential. You need to assure them that they’re listened to and they have the support of your agency.

Take time to reach out to both new and existing clients. Use surveys, ask for reviews and build a relationship with key individuals.

This is the biggest advantage small businesses have over larger competitors. You can get to know people personally. So even if your clients get offered a better deal, they’ll want to stick with you.

3. No ongoing client success 

Some companies do a great job with onboarding and then there’s no follow up. You need to help clients continue making progress towards their goals. 

4. Lack of support 

Everything works until it doesn’t. Downtime costs businesses money. This is doubly true for ecommerce operations. If there’s an issue with your service, they need to be able to get help.

Provide many channels for clients to receive support. Use contact forms, chat boxes, phone numbers, email, and social media. 

After-hours service is a great start. If you can provide 24/7 help, that's even better.

5. Competitor-driven churn 

You might be doing a great job helping clients achieve desired outcomes. But if they believe your competitors are better than you, you’re still at great risk.

You need to help clients reach that first milestone asap. This isn't mandatory forever. But it's a good way to build trust in the beginning. 

Show you're committed to client goals. Then offer your unique expertise to outshine your rivals.

6. The fit isn’t right 

For digital agencies, some services work for certain clients. Or you’ve attracted the wrong type of people to your agency. Whatever the reason, mismatched expectations and outcomes cause churn.

Learning more about your clients is key. See what their needs are and understand them before selling them on a service. Likewise, make adjustments for clients who don't fit into one category but you can help in other ways.

7. Natural churn 

A wide variety of natural issues can cause churn. Businesses can have cash flow issues. And, if your service is non-essential, then it may get cut. Or you may lose key users.

Digital agencies often build relationships with certain people in an organisation. If these people leave, the new hire may have their own preferences. To fight natural churn, make your services essential.

How to Calculate Churn

How to Calculate Churn

Calculating churn is essential. Even if your company is experiencing explosive growth, you need to track churn.  This prepares your agency for long term stability and scaling.

Calculate churn by taking the number of clients you lost last quarter. Then divide that by the number you started the quarter with.

So if you had 100 clients at the start of last clients and lost five clients during the quarter, you have a churn rate of 5%.

Other indicators such as revenue churn and cohort analysis can show a more complete picture of income gain and loss.

Yet, for most purposes, client churn rate provides enough information for your needs. 

5 Actionable Ways to Reduce Churn and Increase Loyalty

Reduce Churn and Increase Loyalty

We’ve already gone over some of the ways you can reduce churn. Let’s dive into some of the most effective strategies to increase loyalty. 

1. Create a good first impression 

[caption id="attachment_10118" align="alignnone" width="1200"]Apple iPhone Apple makes the onboarding process a breeze.[/caption]

It’s so easy nowadays for clients to move to a competitor. First impressions mean everything. From the start, you need to create the foundation for a lasting relationship.

You don’t have to overwhelm your clients with unnecessary information and exchanges. But make sure they have enough information to meet their needs. This is particularly true during the onboarding process.

Give them access to videos and other information they need. Apple is an excellent example. They’re one of the largest companies in the world. Apple has so many incredible onboarding tools. You can go to the Genius bar and browse its vast video collection. 

Apple's best onboarding tool is something all businesses can emulate. After you buy an iPhone, Apple sends you a confirmation email.

This includes an invitation to a personal 30-minute iPhone information session.  A specialist walks you through everything you need to know about your new iPhone.

All digital agencies should offer the same level of service to clients. It not only builds the relationship but ensures the agency is the right fit for them.

2. Follow-up 

Follow-up is important on so many levels. To begin with, you need to ensure your services have helped them hit their targets. Have they been implementing properly? Do they need changes in certain areas? 

Keep in mind this information isn’t just helpful to them, it’s helpful to you. You can see what’s working and what isn’t. This helps your company target new clients, refine offerings, and evolve over time.  

3. Reward loyalty 

[caption id="attachment_10119" align="alignnone" width="1200"]ACE Digital Marketing ACE Digital Marketing offers an excellent referral program to build loyalty.[/caption]

You can find loyalty programs everywhere nowadays. Why? Because they work. From pet stores to digital agencies, people love loyalty programs.

It’s an easy way for them to feel valued and obtain value. And the more loyal your clients are, the less likely they are to churn.

Create incentives for your clients to keep using your services as well as for referral. For example, Ace Digital Marketing offers an incredible referral program. They’ll actually give you cash for referring new clients. Or you can receive discounts on service for existing clients.

And Ace Digital Marketing is generous. If you refer clients for a $1,000 SEO package, they’ll give you $100 each month with no limit on referrals.

Talk about a win-win for businesses. You can not only reduce churn but encourage client acquisition as well.

4. Prevent churn before it happens

[caption id="attachment_10120" align="alignnone" width="1200"]Sleeknote Sleeknote tracks client activity to see if people are engaged.[/caption]

You should sense churn before it happens.  To do this, you need to do is identify at-risk clients. 

You know who they are. These clients haven’t used your services recently or not as much as before. So you need to re-engage them.

Use segmentation to send targeted emails. If you notice a drop-off in retail clients, you can create a marketing campaign tailored to them. Look at past results, progress, and interest and offer discounts to incentivise them. This brings them back into your orbit.

You’ll need to figure out how often you engage. Some clients might not want to contact more than a couple of times per month. For them, use other data you have. Follow Sleeknote's example. See if they logged into accounts, opened emails, or used your services. There's no better indicator. 

5. Make your agency essential 

Your digital services should be essential to your clients. More than anything, your services should be excellent enough to stand on their own. 

Promote yourself by showing the data to your clients. Show how your services have led to increased traffic, engagement, and conversions.

Industry example 

MicroLogic Media

MicroLogic Media embodies this as a top-performing digital agency in Singapore. They created successful campaigns with huge names like Nike, Lexus, and Agoda.

MicroLogic starts with deep research into all their clients. Then, using analytics from previous successful campaigns, they start crafting ideas with clients. They combine all this to create a dazzling finished product that drives results.

Finally, the best digital agencies conduct quarterly audits. They review the best performing and worst performing clients. They'll also use surveys and other tools to get client perspective.  This communication creates better future campaigns while deepening client-agency relationships. 

It’s this dedication to excellence that will make your digital agency essential. 

Test yourself on what you have learned

  • What is client churn? 
  • What are the most common reasons for client churn? 
  • How do you calculate client churn? 
  • Why is your client success team important? 
  • Why is follow-up important? 
  • How do you build loyalty?  
  • What are the strategies for reducing churn? 

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