Customer churn rate refers to the percentage of customers who no longer use our products or services within a certain period of time. For example, when the quarterly business resumes, the customer churn rate can be calculated by dividing the number of customers lost at the beginning of this quarter by the number of customers retained. For example, there were 400 customers at the beginning of this quarter and 380 at the end, with a turnover rate of 5%, which means that 5% of customers were lost. Of course, we can also change the time period to calculate, such as a year, a month or a financial quarter.

However, if we calculate the turnover rate of a quarter, we may encounter a problem: some customers who clinch a deal in the first month of the quarter will be lost in the second or third month of the quarter. If these losses are included in the calculation, the wastage rate will be wrongly overestimated.

For example, 1000 customers before the whole quarter, and only 850 customers remain at the end of the period, then the customer turnover rate is150/1000 =15%. However, if there are 300 new transactions and 15 orders lost in this quarter, if these 15 lost customers are included in the calculation, the loss rate will become165/1000 =16.5%. The simplest way to solve this problem is to exclude all new transactions from the calculation of turnover rate.

Is the customer churn rate really that important? In the continuous sales activities, customers will be lost for one reason or another. If the turnover rate is only 5%, it doesn't sound too bad.

But this is not the case, and every customer who is cooperating is precious. Because the cost of acquiring new customers is higher than the cost of retaining existing customers. For the remaining customers, we don't need to spend time and money to persuade them to choose our products instead of our competitors' because they have already made a decision. According to the report of Harvard Business School, on average, for every 5% increase in customer retention rate, the profit will increase by 25%-95%. On average, 65% of the company's business comes from existing customers.

At the same time, if the customer retention rate of 5% can be improved, these 5% customers will continue to create profit growth. According to the seller's statistics, the success rate of selling to existing customers is 60% higher than that of selling to customers unfamiliar with your brand. Old customers will continue to increase investment in products and services, which can also save customers' operating costs.

So although it seems that the 5% customer churn rate is not serious, we can still get a lot of income by reducing the churn rate. Especially when the overall market atmosphere is tense, the retention of old customers is particularly important.

We must provide customers with high-quality customer education materials or support information, such as free training, webinars, complete video tutorials and product demonstrations. Ensure that customers can increase their understanding of products in a relaxed state. In other words, we should not only give them effective tools, but also teach customers how to use them and show the full potential of products and services.

Actively involve customers in products, usually called relationship marketing, and constantly show customers the daily value of products, so that our products or services become part of their daily workflow, thus ensuring customers' continued purchase. Show important news information, special offers or product upgrades to customers through appropriate channels. At the same time, try to interact with customers through various channels, listen to their opinions and feedback, and establish a comfortable interactive relationship with old customers.

Many times, our strategy for dealing with old customers is relatively simple, that is, contacting customers to renew their contracts when they are due, or occasionally giving them some gifts. In the new situation, if enterprises want to re-manage customer retention, they must realize that avoiding customer churn should be regarded as a new kind of sales, and also need to comprehensively consider the re-formulation of sales strategy, analyze what kind of customers are worth maintaining, the business pain points of existing customers, and maintain the return on investment of customers.

When paying a return visit to an old customer, the sales representative should not just go through the process formally, but complete the routine by asking a few questions. Visiting and talking with old customers should be done in a natural and organic way, just like treating new customers. As long as you treat them with your heart, you will get more victories. The sales talk intelligent tool can precipitate a large number of excellent actual combat cases through the clip library, help the sales to learn casual conversation patterns, and thus optimize their own speech templates.

When the market situation is tight, the people who have the right to invest funds and decide the purchasing strategy of the client company are often at the top of the company, so the promotion strategy should be adjusted according to this situation, and more energy needs to be invested in the sales of the top.

When the position of our sales representative who is responsible for renewing the contract rises to a higher level, such as CFO or CFO, then he will think about whether to renew the contract from a different angle than the docking person we contacted before, so the sales representative needs to know the docking person and prepare a conversation suitable for him. The sales dialogue intelligent tool can automatically transcribe online calls into words, and sales representatives can make corresponding preparations by analyzing historical data. Usually, this kind of conversation needs to show a higher strategic vision and cannot be too limited to specific technical details. If the discussion is too professional, the sales representative may be transferred to the technical department and miss the opportunity for the senior management to renew the contract directly.

There are also some tips that can be used, such as using data to tell a story about a customer's concern. The role of data is very powerful, but if you can't weave data into stories, the role of data can't be played in sales. The product may perform well in terms of data, but because the docking person is an executive, he may not be able to understand the meaning of this value like the person who does the specific work, which requires the sales representative to complete the story for him.

Customers who are about to lose usually have some early indicators, which can be found through loss analysis.

Customer Success Manager (CSM) needs to be highly sensitive to the customers he serves, and make continuous observation and analysis. Through careful observation, we will conduct a "physical examination" on the process of customers accepting products and services, especially on some key steps after signing the bill, such as after-sales service, seeking help, raising objections and claiming compensation. The handling of these links will greatly affect the customer's experience and determine whether the customer will choose other products when it needs to renew the contract. We need to ensure that we can help customers solve problems quickly and provide services in the way they like.

It is ideal to respond to all customers' needs in the first time, but in reality, we always give priority to customers' needs. It is very important to analyze the factors of customer churn through tools with integrated analysis function and automatically identify customers who may be at risk. The customer success manager needs to set a threshold, and take immediate action when the risk approaches the threshold, so as to avoid the loss of customers due to the lack of timely understanding of customer needs. The intelligent platform of sales dialogue integrates the function of business opportunity risk analysis, and the sales manager can customize keywords for automatic inspection. Once the risk of customer loss is found, a prompt will be issued in time to remind the sales staff to follow up.

The importance of customer retention rate for enterprises is self-evident. Our conversation analysis technology can be a powerful helper for enterprises to strive for customer retention. Whether it is analyzing the product experience of old customers or detecting the signal of customer churn in time, it can become a powerful guardian of corporate customers.