Customer churn refers to the percentage of customers who stopped using your product or service over a period. Customer churn is a crucial factor of Industrial B2B marketing because retaining an existing customer costs much less than acquiring a new customer.
Customer churn can happen for multiple reasons. For example, your existing customer might not need your product or service anymore. Or they have found another vendor for the same product offering better attributes like better price and cheaper maintenance costs etc. Another reason could be your failure to sustain the post-purchase relationship with your customers.
Ideally, no business would ever want any percentage of customer churn to happen. It is hardly possible to attain 0% customer churn for any organization. However, you can still try to keep your customer churn to the minimum.
Reasons For Customer Churn
As we briefly mentioned earlier, customer churn can happen for multiple reasons. Let’s discuss the reasons for customer churn in detail:
1. Your cost is higher than the perceived value:
The cost of your solution is a prominent factor in customer churn. Cost is the perceived value of the efficiency and quality of your solution. When your products and solutions cannot justify their cost for their efficiency, ease of use, quality, etc., customer churn happens.
Another common reason for customer churn is when your customers find a vendor selling the same solution at a lesser price.
2. Your products and solutions lack quality:
When your customers purchase, they have certain expectations from your products or solutions. For example, they expect your product or solutions to deliver a specific value for the money they are spending.
Quality depends on how smoothly your product/solution works, how much maintenance it requires, how often a part needs to be changed, etc.
However, if your products or solutions are not as good as the other options available in the market, your customer might perceive them to be of inferior quality. Therefore, when a customer experiences dissatisfaction in quality, they ultimately churn.
3. Your after-sales support is lacking:
More and more industrial companies realize the value of after sale-support now. After-sales support is essential for maintaining good customer relationships. The business that fails to provide hands-on after-sales support to their customers also fails to create a long-lasting relationship. The customers do not value the organizations that turn their back on them once they complete the purchase. It ultimately leads to customer churn.
4. Bad customer experience:
Customer experience is the process experienced by your customers at every touchpoint of your sales cycle. It includes your marketing efforts, interactions with your sales team, account managers, customer support team, social media channels, etc.
Customer experience also includes how well your company is supporting your customer to use your product. This process consists of the delivery, implementation, training of staff on using the product, and helping your customer prove the ROI of the solution.
The transition throughout these touchpoints should be smooth for your customers. If your customers get dissatisfied or unhappy during the entire process, they might not rely on you for buying the solutions any further.
5. Your products fail to deliver the promised value:
An important question to ask yourself is whether your products offer the value you promised. Many a time, companies tend to overpromise to encourage the customers to buy. They set higher expectations amongst the target customers through various campaigns, content, and advertisements, etc.
However, if the product or solution fails to deliver the value or meet the buyers’ expectations, they will refrain from repurchasing from the same company.
6 Practical Ways to Retain Your Customers
1. Set the right expectations from the beginning:
Your customer’s expectations from your products and solutions play a significant role in their overall experience and whether or not they will keep investing their money in your products and solutions.
You must set the right expectation from the very beginning. It means that you only promise what your products or solutions are precisely going to deliver.
Unfortunately, we live in a market where many Industrial B2B companies tend to over-promise or create a somehow false image of their products and solutions through marketing. This practice might initially help attract more leads and get an edge over the competitors, but it is not sustainable.
When your customers realize that your products do not deliver what they expected, they churn. It also affects the brand image of your company negatively. Therefore, Industrial B2B marketing gimmicks are okay as long as they do not create expectations that your products and solutions won’t fulfill.
2. Enhance your customer’s experience:
Customer experience plays a crucial role in customer satisfaction. To avoid customer churn, make sure to provide an effortless experience to your customers at every touchpoint. Use your sales team, customer support team, and other departments to promote uninterrupted communication with your customers.
Make sure that you clearly understand the needs and the pain points of your customers. You can use strategic frameworks such as buyer personas and buyer journey to figure out problems your customers will have at each stage of the buying journey, and then you can resolve them proactively.
3. Take feedback and improve your solutions:
One of the reasons for customer churn is that your customers are not completely satisfied with your products or solutions. To avoid this situation, you need to keep taking customer feedback to improve your existing products and solutions.
When you make an effort to listen to your customers, even post-sales, it makes them feel that their needs are essential to you. Thus, it could be an opportunity for you to build a long-lasting relationship with your customers.
4. Create educational material for your customers:
No matter how technically competent, your customers are, trying a new product or solution can be a little complicated. As a result, your customers will need guidance from you for using your product optimally.
Make sure you help your customers to ease their pain in any way possible. It will increase their reliability and trust in your product and solution and will ultimately help in reducing the churn.
5. Provide value:
As we have already discussed, your customers have a particular perceived value when buying your solution or product. Therefore, to meet your customers’ expectations, you need to provide them value with your products and solutions.
According to the Elements of Value Pyramid, any product and solution provide the following values to the customers:
- Functional value
- Ease of doing business value
- Individual value
- Inspirational value
Depending on the utility of your product, it falls into one of the above categories.
Suppose your products and solutions do not provide your customers with values like simplifying their everyday tasks, increasing their efficiency, reducing cost, saving time, etc. In that case, you will most likely face customer churn when your products and solutions fail to deliver value. So make sure your products and solutions provide some of these values to your customers.
6. Improve Your Customer Support:
Invest more in your customer support to reduce your customer churn. Unfortunately, many Industrial B2B companies lack promptness when it comes to customer support. You should be able to diagnose your customers’ problems and resolve their issues as quickly as possible.
Any delay in resolving your customer’s issues means that your customer is losing money because their production has halted.
Do you like to spend time waiting on hold for customer service or waiting for your emails not answered for days?
Nobody likes this kind of inconvenience, and therefore you should make sure that your customers don’t go through it either.
Have a dedicated customer support team and improve coordination in various departments of your Industrial companies like your product team, R&D team, sales team, technical experts, engineers, etc., to improve your customer support.
Customer churn does not look good for your business and brand image. On the contrary, it can hamper your growth, and converting new customers can get more expensive and a challenging task.
Therefore, you must take all the measures to prevent customer churn. A good Industrial B2B marketing consultant can help you with the marketing strategy and give you the right advice for reducing customer churn.
At Dijitale, we aim to help Industrial B2B companies to overcome their marketing challenges. You can always consult us if you have any questions regarding customer churn or any other marketing-related activities; we are always happy to help.