New Findings Shed Light on What Companies are Doing to Keep Customers
Today’s company-customer relationship no longer revolves around one-off purchases of goods and services. We live in a subscription-based world where companies give their customers the flexibility of multiple pay options that best fit their needs. This model rewards companies who prioritize delighting their customers with stellar products, services and support. Benefits include predictable revenue streams, repeat purchasers and word of mouth growth driven by customer referrals.
Yet, with its ease of use, low upfront costs and low setup efforts, it has become exceedingly easy for customers to cancel, downgrade or switch to a competitor via a few clicks.
The result? Immense churn and attrition.
Customer retention is imperative to building a business model that drives sustainable growth. But there’s relatively little documented or developed best practices to follow. To expose a deeper level of insight, we asked 300+ CEOs, founders and executives across 28 industries about their customer retention objectives, and what tactics their using today and plan to use in the future.
We conducted this Customer Retention Survey to know more from our respondents beyond their attitudes toward retention initiatives and tactics. What tools are they using to manage their business and grow their customer base? What do their churn and growth rates look like?
One common thread among all companies: customer retention is a main focus. Ninety-seven percent of leaders say that retention is a top priority in 2019. But as expected, approaches differ.
Six key trends stood out:
- B2C companies know they must do better at retention
- B2B companies prioritize customer education, while B2C focus on support
- Today most companies turn to discounts and deals to retain customers
- The future of retention is knowing when to engage and why
- Subscription businesses churn an average of 2.0% – 3.9% of revenue each month
- Only 1 in 4 subscription companies are growing more the 30% YoY
The customer experience is universal. A paying customer wants to find a solution to a need from a product or service. When that transaction breaks down, customers leave. In spite of how many businesses may label or define them, cancellations come down to a handful of reasons related to product concerns, inability to execute, changing needs, pricing concerns, poor service and internal/company changes (like going bankrupt).
Many customers don’t actually want to cancel, they just need to be presented with the right information at the right time in order to address their unfulfilled need. Here at Brightback, we’ve found that by providing a personalized workflow based on the customer need, companies can reduce cancellations by 10 to 20 percent or more.
Now CMOs and customer success and growth leaders can meet customers at the point of cancel, automatically serve up personalized offers that meet their needs and collect data about why accounts left or were saved.
Our full report includes the monthly recurring revenue (MRR) churn rates and year over year revenue growth rates from our respondents. As well as the top CRM, e-commerce, billing and customer support systems across B2C, B2B and hybrid companies.
Check out all the findings by downloading the free report here.
Contributed by April Rassa, leader of product marketing and growth at Brightback, the industry’s first customer retention automation software for subscription businesses. Rassa has more than 15 years of management experience across various industries and is a strong advocate for the overall customer experience.