Did you realize that getting a new client might cost up to five times as much as keeping a current one? Not only that, but a 5% increase in client retention may boost profitability by 25% to 95%.
Getting new clients is crucial, but keeping existing customers and increasing existing accounts is even more critical – especially in B2B interactions.
It takes time and money to generate leads. It requires much more time, effort, and talent to convert these leads in to clients. That implies you’re putting a lot of money into each new client you get. Getting a new customer on board, though, is only the beginning. All of your efforts up to that point might be for naught if you don’t care about them and develop the relationship. They might rapidly become just another number on your ‘churn rate’ tally.
What is churn rate?
The rate at which your consumers abandon their association with you or opt to go elsewhere is referred to as the churn rate. This rate is important for your future business growth goals and might be a solid signal that certain aspects of the company need to be examined.
Although losing clients isn’t always about the service, goods, or connection, most organizations will see some movement in this area.
Keeping track of the clients who leave you, on the other hand, might be eye-opening. Make sure you keep accurate records of who is leaving when they are going, and why they are leaving. What is their feedback like, and do you usually ask for it? Are there any patterns to be found? Is there a part of the business that needs to be addressed or improved?
Knowing the average length of time clients stay with you can help you calculate a client’s lifetime value, which will benefit in predicting. Plus, if you decide to make any adjustments, you’ll have a number or % to compare against, providing you a means to see if things have improved.
Reducing the customer churn rate can be beneficial on many levels, not least of which when it comes to your bottom line.