Ways To Cut Your Churn Rate In Half

Dec 1, 2022 | JC Hite

Churn rate plays an important part in business success. Keeping track of customer churn rate helps companies to identify when a customer is no longer interested in their product or service and can help them take steps to improve retention rates.

Scaling your business is all about growth, sales, and handling your clients. As an agency owner – that has several hundred clients and full-time team members– I’m all about scalability. Today we’ll be talking about customer churn.

Why Is Churn Important?

Churn is a huge factor when it comes to sustainability across the U.S. I’m seeing on average a 10 to 12% churn rate. If you’re doing only Facebook ads that can even be a 20% turnover. That means every month clients will leave your company at about 10% due to different factors– the client went out of business, they didn’t like you, the results weren’t what they expected, etc.

What many people don’t realize is that you have to start forecasting this. Let’s say at 10% you’re bringing in two clients every month. Once you hit 20 clients you’ll also be losing 2 clients. So every month you’ll be gaining two and losing two. As you’re scaling it’s important that you focus on churn.

7 Tips To Focus On

There are seven things that you need to focus on when it comes to customer churn. 

1- Sales

The number one sales right is honing in the sales process. At Hite, what we look at when a client leaves in the first 30 days, which shouldn’t happen as we’re setting long-term expectations, and even pay per click, and PVC. 

If a client leaves in 60 days, I’m putting 60% to 70% of that on my sales guy. Even in the first 90 days we’re gonna have to take a look back at:

  • What expectations were set
  • What we told the client
  • How quickly we told them they’d see results

Sales is crucial when it comes to churn rate, and when it comes to keeping a client for a really long time. 

2- Baseline

When I’m bringing on a client you have to ask yourself “what am I dealing with?” this question covers a lot of things:

Their SEO: 

  • How much traffic are they getting into their site? 
  • What is that site converting at?
  • What is their pay-per-lead volume right now?
  • Is analytics set up right?

If they have 10 leads, how many of those are they closing? Where are they getting the leads? If they’re referrals then I would expect a high conversion, If they’re Facebook leads then that tells me something else. Getting a baseline on your clients is crucial. A good marketing company should build on what the client already has, not starting over. 

3 – Expectations

Setting your expectations for fulfillment is key to keeping your clients happy. You need to ensure that you are able to deliver on what you promise, and do so in a timely manner. If you’re not able to meet deadlines or expectations, be sure to communicate that to your client as soon as possible. 

It’s so important to be in communication with your fulfillment team to ensure you’re setting the right expectations. If a client is expecting something that you know will take longer than usual to fulfill, set that expectation upfront so there are no surprises down the road.

4- Onboarding Experience

The onboarding experience is extremely important. You have to ask yourself what’s your next touch point when you sell that client. In my opinion, every single client should know and should be on the calendar when their next meeting is. 

It’s important to let the client know when things are happening so they can be prepared. Let them know when you’ll be onboarding and who their account manager is. If there’s going to be a delay on the project, let them know as soon as possible so they can adjust their expectations. Making their experience as smooth as possible from start to finish is essential to keeping them as a client.

5- Over Communicate

It’s essential to over communicate. I communicate at a ridiculous level with the clients, or used to with personal clients when Hite was starting out. I wanted them to know everything; if we got a lead, how we made it happen, etc.

Implementing this across our franchises, we’ve experienced across the year with big and small agencies a 5.6% average customer churn rate. Communication is key.

6- Be Transparent

Part of the communication aspect is being transparent. In the digital marketing world we have this belief that if we do our best we’re always going to win. But digital marketing, at the end of the day, is a competition. Which is why it’s essential to be critically transparent with clients. 

Be honest, if things aren’t going the way you thought they would, let them know. Then guide them through what you’ll do from that point forward. “This didn’t work, so now we’re gonna be doing this other thing, and if that doesn’t work the plan will be this.” Be transparent. 

7- Do What You Say

So you talked to the client, you found out where they’re at, you’ve reached out to fulfillment– whether they’re a part of your team, white label, or other– you asked them “what can I do with the client?” they told you x, y, z, and now you’ve set the expectations with the client. 

So now, you have to do what you say. At the end of the day, if you’re not doing what you say it goes back to transparency, communication. If you’re not being honest with your client about what’s going on, that’s where the mistrust starts to set in and they start to get upset.

Churn Rate Is Crucial

Customer churn rate is so crucial, you need to be thinking about your turn numbers constantly. I notice a lot of people are obsessed with their sales numbers, talking constantly about them, and even if you might be selling 10 to 20k a month, if your clients are leaving you as quick, all you’re doing is rotating those numbers.

If you want to learn more about scaling your business with stability and purpose, don’t hesitate to get our book. There we’ll talk in depth about finance, goals, prospecting, tools, service, and more.

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