We can agree that poor customer service is linked to high customer churn rates. With more and more customers demanding personalized service and support, businesses need to take proactive measures to ensure their customer churn rate is low.
But how can businesses ensure their customers are satisfied and feel valued to the point that they become loyal customers? This article looks at what’s driving customer churn and how business owners can reduce the potential for lost revenue.
What Is Customer Churn?
Customer churn occurs when customers or subscribers stop doing business with a company; it’s also known as customer attrition. Why is it so important to pay attention to customer churn? It’s much cheaper to retain customers than it is to acquire new ones. Instead of utilizing marketing and sales resources to attract and gain the trust of new customers, it’s much more cost-effective to make the effort to retain those whose trust and loyalty you’ve already gained.
High customer churn rates can impede the growth of a business, which is why companies should have a defined method for calculating it over a period of time. Being aware of the customer churn rate and consistently monitoring it can help companies identify customer retention success rates and highlight areas that need improvement. The first step to reducing customer churn is recognizing the causes.
Causes of Customer Churn
- Poor customer service
- Lack of first-call resolution (FCR)
- Inconsistent support across phone, live chat, and email
- Limited support availability
- Lack of multilingual support
- High pricing or better offers from competitors
- Poor product/service quality
- Weak customer engagement and follow-ups
- Difficult refund or return processes
- Negative customer experience and lost trust
The High Cost of Customer Churn
Customer churn is a direct loss of sales with a decline in the potential for future revenue and upsell. With more than 65% of a business’s revenue coming directly from existing clientele, businesses risk losing substantial money each time they lose a loyal customer. This leads to a decreased customer lifetime value (CLV).
In addition to the obvious loss of revenue from failure to retain customers, a business can also suffer adverse effects from poor word-of-mouth. It can cause a ripple effect throughout the workforce as employee productivity and morale decline. Furthermore, businesses may need to invest in marketing strategies to gain back their credibility. This can increase expenses as it costs more for acquisition than it does for retention.
How Bad Customer Support Fuels Churn
- Slow Response Times = Frustrated Customers: Long wait times and call transfers can cause customers to take their business elsewhere due to feeling unappreciated.
- Lack of First-Call Resolution (FCR): Customers expect issues to be solved on the first contact attempt, and if they’re not, it affects their impression of a company.
- Incompetent or Unhelpful Agents: Untrained agents provide poor communication, they lack knowledge of the products or services offered, and they are unable to resolve issues.
- Lack of Omnichannel Support: With the majority of customers using multichannel options for their communication with a business, an inconsistent experience can lower customer satisfaction.
- Poorly Designed Self-Service Options: High customer churn is the result of inadequate self-service options such as complicated purchase/return policies, unclear FAQs, and insufficient online resources.
- Lack of Personalization: Quality customer service means offering personalized choices based on purchase history to prevent customers from feeling undervalued.
- Failure to Follow Up & Engage Customers: Creating goals to obtain profits without engaging the customer with follow-up options leads to huge customer loss.
Strategies to Reduce Customer Churn with Better Support
Invest in Faster & More Efficient Support
Customer attrition can be reduced, and even prevented in some cases, by streamlining support services. Having the infrastructure in place to offer quick and efficient customer service with call routing and help desk services can lower the wait times.
Train Customer Support Teams for Retention-Focused Conversations
Customer retention begins with excellence in customer service and support. All agents and management personnel need to be competent in problem-solving skills and empathy-driven techniques.
Provide Bilingual & Multichannel Support
With the advanced technology available for live chat and email support services, multichannel options can be offered in English, French, and Spanish to cater to a wider customer base.
Proactive Support to Prevent Issues Before They Arise
When attempting to reduce customer churn, customer service agents should send follow-ups, order confirmations, and appointment reminders. Proactively tracking customer behaviours and purchase history can uncover signs of potential dissatisfaction.
Why Outsourcing Customer Support Helps Reduce Churn
- Scalability: With seasonal promotions, customer demand, and peak season opportunities, businesses need to be able to scale their services as needed.
- 24/7 Support: While business hours limit customer service availability, entrusting a customer service partner to deliver solutions means you’ll never miss a customer contact.
- Cost Efficiency: A third-party customer service provider has the infrastructure in place and trained professionals to reduce overhead costs and maintain quality.
- Access to Trained Specialists: To meet customer expectations, you need retention-focused support. These professionals have technical knowledge about the product or service offered to provide effective and timely solutions.
- Multichannel & Multilingual Support: Multilingual service helps improve the customer experience. This, along with multichannel support options via phone, live chat, and email networks, reduces wait times.
Outsourcing vs. In-House Inbound Support: Which Is Better to Reduce Customer Churn?
| Feature | In-House Support | Outsourced Customer Support |
| Availability | Limited to business hours | 24/7 coverage |
| Scalability | Hiring and training delays | Instantly scale up or down |
| Cost | Higher salaries, training, and infrastructure costs | Lower operational costs with flexible pricing |
| Multichannel Support | Often restricted to phone or email | Covers phone, live chat, and email |
| Multilingual Support | Requires hiring bilingual staff | English, Spanish & French support included |
| First-Call Resolution (FCR) | Dependent on internal training | Trained specialists for high FCR rates |
| Technology & Tools | Requires software investment | Integrated CRM & ticketing solutions |
| Customer Satisfaction | Dependent on team efficiency | Proven expertise in retention-driven support |
Explore the Customer Churn Solutions Offered By 3C Contact Services
Improve your inbound customer support with the custom churn reduction solutions offered by 3C Contact Services. Our expert outsourcing solutions are tailored for long-term success based on the needs and services of your business. Contact us today to discuss how we can enhance your customers’ experience!
