9 Best Strategies to Reduce Customer Churn And Improve NPS®


Top Strategies to Reduce Customer Churn And Improve NPS Funnel Analysis
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Expanding your business doesn’t solely depend on appealing to and acquiring new customers. It also includes retaining existing customers and keeping them coming back to your business. Why? Because returning customers tend to spend more on your products than first-time buyers. 

Your customer-focused business should implement strategies to reduce customer churn and improve NPS. This means cultivating loyal customers, turning passives into promoters, and saving detractors from churning out. 

High customer churn and low NPS can be costly and damaging to the business. In this blog, we will look at why you should use NPS as a metric to reduce churn and 9 effective strategies to boost retention and loyalty.

What is customer churn?

Customer churn, simply put, is a metric that tells you the number of customers who has stopped doing business with your company. When a customer stops renewing their subscription to your company or stops buying your products, it indicates customer churning

Customer churn leads to unpleasant business results in two-folds. 

→ It results in decreasing customer lifetime value.

→ It costs more to acquire a customer. 

Organizations must make efforts to understand why customers are churning and what strategies/marketing campaigns will keep them from churning. 

What is NPS® ?

Net Promoter Score® is a customer loyalty indicator. You can assess customers’ satisfaction and loyalty to your business by asking them a single rating question. Based on the ratings you receive, you can identify what percentage of customers are likely to be your brand advocates and how many are at risk of churning. 

The most common and popular marketing metric, NPS® , helps you sort your customers into three categories to determine the risk of churning in each category. 

  1. Promoters = Customers who are extremely satisfied with your company.
  2. Passives = They are neither satisfied nor dissatisfied with your company. 
  3. Detractors = Those who are completely dissatisfied with your company. 

Before we look into the top strategies to reduce customer churn and improve NPS® , let’s understand how the net promoter score can help you prevent losing customers. 

Ready to take your customer experience to the next level? Follow our NPS guide to see how to turn customers into advocates.

Why should you use NPS as a metric to reduce customer churn?

Top Strategies to Reduce Customer Churn And Improve NPS Funnel Analysis

As a metric, NPS helps you identify loyal customers to your brand. However, it also identifies customers who are dissatisfied with their experience and are likely to churn. This way, you know who should be central to your customer retention strategy. 

It can help you understand what efforts to double down on and where you need to make improvements. 

1. Identify changes in CX & loyalty

Tracking NPS regularly can help you understand how your customer experience and loyalty are changing. It can show you if the efforts have made any positive changes. 

Has there been an increase in promoters? Or are more customers turning passives and detractors? 

NPS allows you to track the impact of the changes you have made and helps you evaluate your customer retention strategy. 

2. Gather unfiltered customer feedback

Instead of waiting for annual surveys, you can gather unfiltered, relevant, and real-time data using NPS surveys. The follow-up feedback collection question encourages customers to share their opinions. 

Ask a personalized question based on the scores of promoters, passives, and detractors to gather unbiased opinions. The open-ended question helps you uncover the reason behind increasing promoters or churning, making it a top strategy to reduce customer churn and improve NPS. 

3. Influence customer behavior

Customers are more likely to trust a company referred by their friends and families. The more promoters you have, the higher the likelihood of increasing referrals. 

Moreover, you can use this metric to identify promoters and offer them incentives to encourage positive customer behavior. 

4. Expand business

Did you know referred customers generate 16% more profits? Mouth-of-word is the best marketing strategy. Customers tend to trust the referrals they receive from their friends/families, which makes them more loyal. 

Along with identifying promoters, it also helps you identify detractors and learn about their pain points. This gives you an opportunity to turn them into passives and encourage a sense of loyalty to your business. 

This sums up our reasons why you should track NPS to reduce churn. Now let’s take a look at nine strategies to reduce customer churn and improve NPS.

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9 strategies to reduce customer churn and improve NPS®

Top Strategies to Reduce Customer Churn And Improve NPS Funnel Analysis

How can you convert unhappy customers into brand ambassadors, reduce customer churn, and improve NPS? Monitoring your NPS and customer churn can help you increase lifetime value and create meaningful experiences. 

Let’s look at nine ways you can reduce customer churn and improve NPS. 

1. Leverage NPS surveys across the customer journey

Monitoring the customer journey can help you evaluate how your customers behave, at what point they drop off, or when they decide to purchase. By looking at their journey before they become your customer, you can identify what needs improvement. 

Every customer takes a different route. Using NPS surveys at various interactions can help you envision these routes and find out what’s driving them away. If a customer drops off after adding products to the cart, you need to find out what’s causing that behavior. 

NPS surveys at critical touchpoints can help you uncover what their expectations are and what they are not satisfied with. 

Additional read: Improving customer loyalty by measuring experience across the journey. 

2. Identify root causes for customer churn 

Uncover customers’ pain points and friction in the customer journey leading to churn. Use 2 simple questions – likelihood to recommend & follow-up “Why” question – to learn what made customers give the particular NPS score. 

This will help you understand what customers are unwilling to accept and how much a negative experience impacts their behavior. 

Knowing the reason for dissatisfaction, you can make strategic decisions on which features to improve and which ones you should take down. Leverage survey software that enables you to create interactive NPS surveys for feedback collection. 

3. Close the loop & address customer feedback 

You can leverage an NPS survey at critical interactions to understand the customer experience in real-time. Furthermore, it also allows you to gather insights based on their scores. You should use this opportunity to close the feedback loop and communicate with customers about your action plan. 

Don’t simply thank them but engage with customers in in-depth discussions to understand their expectations and gather suggestions from them. Take a personalized approach with closed-loop feedback regardless of negative or positive responses. 

Take the time to show that you are listening to them and taking their suggestions into consideration. Address their feedback and keep them in the loop on how you plan to improve their experience.

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4. Reach out to detractors

Gathering feedback from detractors will highlight the weaknesses in your business. It will help you learn why they are unwilling to recommend your business to their friends. 

Whether the negative feedback is about your company, customer support agents, products, etc., gathering the feedback can help you optimize the experience instantly. If you address their issue directly, you have a shot at influencing positive experiences and retaining them. 

Customers won’t recommend a product to their friends if they won’t use it themselves. So, learning what’s stopping them from referring your company can open the opportunity to evaluate your services and employ a customer-focused approach. 

Additional read: NPS® guide to turn detractors into promoters.

5. Never forget the passives

Your passive customers are telling you that they are a few steps away from either becoming your advocates or silently churning away. 

They are moderately satisfied and happy with your business. But it still lacks something that is stopping them from converting into promoters. 

Engaging with them will tell you why they are giving you a second chance and are willing to stay with your business a little longer. Ask them what you did right and what wasn’t as great as they expected. 

Passives can give you insights into both aspects of your business – your strengths and shortcomings. Leverage them to find out what you can do to keep them from turning into detractors. 

Regularly track passives and communicate with them how you intend to improve their experience. This way, you can monitor changes in the CX & loyalty over time and double down on efforts that are positively influencing. 

6. Embrace & celebrate the promoters

Sharing positive comments and referrals but not receiving any appreciation may make promoters unhappy. While promoters are happy to leave positive reviews as they receive products/services worth the money, showing appreciation and offering incentives can be lucrative. 

Show them appreciation by giving them access to early deals, better discounts, free gifts, etc. This will not only encourage them to purchase again but also influence word-of-mouth. Engage them in a referral program that rewards them for their positive reviews and successful referrals. 

Positive reviews on websites would prove that your business offers an excellent experience. It would influence passives and detractors, reduce customer churn and improve NPS®

7. NPS® + Other surveys = Quality insights

NPS® surveys can help you learn the reasons behind the scores – what customers are satisfied/dissatisfied about. However, combining it with other surveys, such as CES or CSAT, can help you create a whole picture of customer experience. 

CES measures the effort a customer has to give to get their issues resolved or complete an interaction. While CSAT can show you how satisfied customers are with the products, services, and interactions. 

Combining NPS® surveys with other surveys will help you dive deeper into every aspect of the customer experience. Robust online survey tools should enable you to gather data using NPS® , CSAT, and CES surveys and extract insights using text analysis

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8. Develop customer support programs

Take a customer-focused approach to reduce customer churn and improve NPS across the organization. Design a customer support program that puts customers’ voices at the center of it. 

Implement superior customer service that offers faster and more effective resolution to customer issues. Create channels to allow customers to reach out to you immediately and route them to the right agent/team to offer efficient help. Train your agents so they are able to fix issues and answer customer queries instantly. 

Leverage self-service support to allow customers to resolve simpler problems by themselves. Customers get irritated if they wait a long time to connect to an agent. On top of that, if they have to make more than one call, it results in a bad experience. 

Develop a customer support program that offers instant support and boosts customer satisfaction. 

9. Segment the customer base to focus on the value proposition

NPS helps you segment your customer base into three categories based on their level of satisfaction with your business. This allows you to tailor your strategies and campaigns based on their pain points, needs, and expectations. 

Customer segmentation allows you to see how you can encourage each category to become a brand advocate. Group customers to find what problem each category faces so you know where you should start making improvements. 

Use customer segmentation to extract insightful data and make data-driven changes to optimize the customer experience. 

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Existing customers are integral to brand image and business growth. More than acquiring new customers, it is important to retain old customers and improve loyalty so you can gain more revenue. 

It is not possible to control and reduce churn using NPS. However, the loyalty metric can help you critically observe what’s causing the churn and help you take the initiative in making improvements. Leverage the nine strategies to influence customers’ behavior, reduce customer churn and improve NPS. 

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