One critical area where businesses are losing more revenue than they may realize is due to customer churn, or customer attrition. We made a free tool to help calculate and relate churn into real numbers, and understand how improving your churn rate can improve your bottom line. Jump to it real quick and then come back to learn more:
Discover your churn rate using our new free tool
Welcome back! See how easy that was? All you need to determine your churn rate is the total number of customers you had at, say, the beginning of last month, and the number of customers that stopped being customers during that month. Taking it one step further, if you know the average revenue that each customer brings in, you can start to calculate the revenue lost due to churn.
Your churn rate is very important. Even if you had a low number such as a 5% churn rate, that would mean you would be losing 60% of your customer base every year. You fought hard to win those customers, why are you letting them go?
By taking action you can start to reduce your churn rate and improve customer retention, which is what the second half of the calculator helps you do. If you can improve retention by 10% each month, you could end up with thousands more dollars in revenue as you keep those customers. The tool helps you figure out just how many big screen TVs, cruises, jet packs, or even Ferarris (!) this translates into for you.
But improving customer retention isn’t just about building up your bank account. If you are actively working to improve customer retention, that most likely means you are actively working to improve customer service and the overall customer experience. The more you can deal with your customers one-on-one, as individual people who would love to keep using your service if you do right by them, the more your customers are winning as well.
At O3 we are trying hard to reverse technology’s previous trend of making businesses big and faceless. Your business can’t afford to be impersonal anymore. Every good relationship is handled at the individual level, and paradoxically technology can bring that personal touch back into play. Reaching out to each and every one of your customers is a great first step, and following up is even better. We’ve made tools to specifically enable this, and we’ve seen our customers hitting retention improvement rates as high as 10%, which has translated into tens (and even hundreds) of thousands of dollars of increased revenue.
If you want to find out more about how your business can benefit from decreasing churn and improving retention, or if you are just curious to find out what your churn rate is, use our free churn rate calculator to find out now.