Written by Every business wants its relationship with customers to be as prolonged as possible. But it’s practically impossible to do so, and that’s why the concept of customer churn exists. But sometimes churn becomes a huge problem when it becomes very high. But do you know you can actually manage it with the NPS survey? Yes, here’s a simple NPS Survey. Here’s the blog to learn how.
Understanding Customer Churn
In very simple words, customer churn is when customers leave. But it’s not as simple as it looks; why? Customer churn not only marks the end of the business with a particular customer but also marks multiple costs and lost revenue.
Firstly, customer churn leads to the loss of potential revenue that the customers might have helped you make. But since they have left now, you can’t make this revenue anymore. Now, apart from the lost revenue, you have costs associated with the customer churn. To get the revenue you have lost, you need new customers, which comes at a cost called customer acquisition costs. Moreover, sometimes, the customers who left don’t even compensate for their acquisition costs, which is a loss to cover from other sources.
In addition to all this, the fact that customer acquisition is way more complicated than customer retention makes it even scarier for businesses. But why do customers churn? Here are some possibilities!
Why Do Customers Leave?
Customer churn can occur for many reasons: the service doesn’t meet their needs, prices seem too high, or a competitor offers something better. Poor support, lack of engagement, or unmet expectations push them away. Keeping them loyal means staying valuable, listening to feedback, and building strong relationships.
Five Steps to Manage Churn with NPS
Now, let’s understand how you can get help from NPS to reduce the churn in your business. But before we jump to the main point, here’s a brief on how the NPS survey works.
In an NPS survey, customers are asked a question, to which they respond with a rating from a given scale of 0-10. The customers are categorized into three categories that are:
- Promoters: those who rate 9-10
- Passives: those who rate 7-8
- Detractors: those who rate 0-6
Now, a promoter is highly likely to recommend you to others and is a happy customer. A passive, however, is an uncertain customer, and a detractor is unhappy and highly likely to churn.
Now, here’s how to manage your churn with NPS.
Map Customer Journey and Send NPS Survey
First, you need to create a customer journey map, which is basically a map where you keep all the customer touch points you have. Let’s say you have an app and want to reduce its churn, then find out what are points where a customer interacts. You’ll find out many things, like if it’s an e-commerce app, then the cart, the checkout, etc., are the touch points. Once you have your customer’s journey mapped, place an NPS Survey on each of these touch points and get the individual NPS score.
Find Out Customers’ Pain Point
Based on the data you get with the above practice, you can learn about the touch points that aren’t performing well. Moreover, with the help of an open-ended question, you can know what exactly the problem is with the touch points that have low NPS. So, now you know the problems to act on, and as you implement the changes, let your customers know about the changes you did.
Get Benefits from Promoters
Now, acting on promoters, detractors, and passives in the same manner is not going to work. It should be customized as per the customer category you are dealing with. So, first up are the promoters with whom you can get the elements of trust like testimonials, reviews, and good ratings. Ask these customers to share their reviews and testimonials, which you can use to showcase the trust your customers have in the new customers who explore you.
Convert Detractors into Passives
To take action on detractors, you need to understand that they are those who will increase your churn. So, your approach must be direct. First, acknowledge your mistake with an email and then ensure that you are working on their problem, even if it’s being faced by many. Now, implement the changes and inform the detractors that their issue has been resolved. In some cases, you can also compensate for their loss. For example, Excitel, a broadband provider, often gives their customers a few extra days if they have faced a long internet connection loss and informs them about this compensation with sms, email, and in-app pop-ups.
Manage the Passives
When it comes to passives, the reason why they are passive can vary. It’s not mandatory that they aren’t happy with the product or service you offer. It could be some other reason, like not having a bond with your brand. So, the way to deal will vary. In some cases, the way you dealt with detractors might work, or in some cases, you may need a different approach, like under promising and overdelivering, to gain their trust and confidence in you.
Why Use QDegrees NPS Software to Reduce Customer Churn?
To do everything we learned above, you need an NPS survey software. However, an NPS survey tool can go beyond just taking surveys if you choose the right one. QDegrees, one of the best NPS tools, is not only about calculating NPS but also about giving you actionable insights. It lets you know about your promoters, detractors, and passives, along with their pain points. So, you will execute not only an NPS survey but also a comprehensive strategy.
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