There are many components of a business that are needed to function properly and maximize profits. However, there is one such phenomenon that can halt that is customer churn. In essence, churning is simply a reference to a percentage of customers have ceased to do business with an organization. This number is usually derived by dividing the total number of customers lost in the quarter by the number of customers that were there at the beginning of the quarter.

Also referred to as customer attrition, high customer churn rates can prove to be a foreboding sign for any business, because it signals that there is an internal issue with the company that is causing revenue to drop.

While any company is subject to churning every now and again, there are strategies that you can implement in order to circumvent the number of people who are on the fence of leaving. Follow these tips to help reduce overall churn.

Incentivize

The easiest and most fool-proof strategy for circumventing churn is to incentivize the customer is staying. This incentive can come in many fashions. Usually, it is something special such as membership to a loyalty program, a promotion, a special discount or something given for free.

Of course, when you are thinking about these incentives, there are certain things to consider. One of the first things you will have to consider is what the customer needs. If you have analyzed that the customer in question has a high probability that they will be leaving due to dissatisfaction, you should incentivize the customer while working towards a solution.

You also have to consider the cost of offering these promotions. Since you will be offering discounts or giving away things that a significantly lower price, you will have to consider if the lowered price of these promotions will not hurt the company more than the customers being lost.

Ask for Feedback

If you are noticing that a significant number of customers are leaving within a certain time period, you need to discover the reason why to prevent that number from growing. This is why asking your customers for honest feedback and constructive criticism is important.

The customers are looking for a need to be satisfied and if that need isn’t being satisfied, they will look towards a business who will. You can give out online surveys to fill, ask for a rating or even have live chat features to get a more personal view of what the customer feels is wrong.

Analyze Churn While it Happens

One of the most important things to do with churning rates is to address it as soon as it happens. Businesses need to take a proactive, and not a reactive, approach to addressing customers leaving.

If you wait a significant period of time before you act on churning rates, a lot of customers may leave by the time you are able to do anything about it. You need to know when the customers are leaving, how long it took for them to leave after using a service and the number of days they are gone.

Put all of these trends together, and devise a plan to make things right. This should also be a time to reach out to high-risk customers that may leave