Topic(s):Customer ExperienceCX & Business StrategyCustomer Retention
Not knowing why customers churn makes it hard to improve sales performance
For most companies, 2020 was a major rollercoaster. Some organizations have seen growth in an unexpected way. For many others, it’s been sink or swim. With physical branches closing and opening up again, revenue streams have been quite unpredictable. When your sales numbers have taken a hit, you want to understand where that change comes from. The first step? Understanding why customers churn.
Bad experiences lead to churn
In uncertain times, sales teams are often under investigation. Still, if you want to improve sales, you need to understand why customers churn in the first place. You might have an awesome sales team, but if you’re not offering the right customer experience, the battle for new customers is lost before you’ve even started.
Gartner predicted it some time ago, but customer experience is an important competitive advantage. It has surpassed product and price as key brand differentiators. Failing to deliver hurts your sales performance:
39% of consumers avoid vendors for over two years after having a negative experience.However, a good customer experience makes customers 3.5 times more likely to make additional purchases.
76% of consumers expect companies to understand their needs and expectations. In other words, they expect a tailored experience.
Use customer feedback to improve performance in a targeted way
Your assignment is to find out what went wrong. What makes customers unhappy? What prevents them from buying again? To do that, customer feedback is indispensable. If you’re not yet capturing feedback, get started ASAP. If you already capture feedback, but nothing is changing, you’re probably not getting the right insights from it to really take action. Still, open feedback is super impactful and can help you improve sales performance in a quick and targeted way.
Easily prioritize remediation efforts
When you prioritize remediation efforts, do you do it based on customer input, or based on what you think is most important? If the second is the case, chances are slim you’re actually improving for the sake of the customer. Feedback shows you what is a real issue to which customer segment. You might think you need a bigger product range, whereas your customers are actually dissatisfied with the personnel in one of your stores. In other words, insights from customer feedback help you to decide which action you should take next.
Stop wasting budget
Once you know what the most urgent issues are, you can prioritize your budgets better too. If personnel friendliness is a driven for churn, you need to invest in coaching. Benchmarking your stores or agencies helps you determine which branches perform best or worst. If training is necessary, you’ll know exactly which teams to train and how service can be improved. Finally, if your coaching efforts pay off, you’ll see an increase in satisfaction again. And happy customers are likely to pay more and to purchase more frequently.
Combat churn in real-time
Ideally, you capture feedback as close to the customer interaction as possible. So, ask for feedback right after the sales transaction gets registered in your system. This allows you to pick up on unhappy customers quickly and battle churn almost in real-time. Even if the experience itself was bad, a good follow-up can turn the tide and prevent that customer from leaving still.
To wrap it up
Customer churn is inevitable. But nevertheless, it’s crucial to understand why customers leave, especially when sales are dropping. Before turning your eye to your sales teams, find out what went wrong. If the issue lies with them, make sure your teams receive the right insights and feedback so they can improve the experience. And once the experience is better tailored to the customer’s needs, sales will soar again too.
Net Promoter Score, NPS, and the NPS-related emoticons are registered U.S. Trademarks, and Net Promoter Score and Net Promoter System are service marks, of Bain & Company, Inc., Satmetrix Systems, Inc. and Fred Reichheld.
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