Ways to Re-engage Customers Before Churn


Apr 28, 2022 • 8 min read

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Preventing customer churn is the key to increasing your revenue. And if your company doesn't invest in a customer retention strategy, your business is at risk.

A SaaS Capital study revealed that a 1% reduction in customer churn could increase a company's valuation by 12% in 5 years. To prevent customer inactivity and churn, you need to analyze why customers are losing interest to your brand and take action to address the issue.

But what can you do to predict churn? What are the main signs of pre-churn? How to build a strong re-engagement strategy? This article will provide recommendations for suggestions and answer your concerns.

Understanding Churn

Churn refers to the percentage of customers who use your company's products or services over a certain period. It is usually calculated by dividing the number of customers lost in a quarter by the number of customers starting that quarter.

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Of course, to get a clear picture of your churn, some form of customer segmentation is essential. For most businesses, new customers will have a higher churn rate than existing customers, so failure to segregate your customer base even at this base level can give you a biased picture..

How Churn Affects your Business

Customer churn is also called defection, attrition, or turnover and is the opposite of a business's ability to retain customers. Churn occurs when a customer stops using a product or service, for example, cancels a subscription or closes their account.

High customer churn rates ultimately undermine a business' ability to generate profits and affect its return on investment. There are at least four ways this churn can be bad news for companies.

  • The consequences of churn can be long term

Churn removes all value from future opportunities with customers. In addition, you have also lost the chance to sell other products or services in your portfolio. You've reduced the total market that would otherwise have been gained because that customer has left or quit. What's more, your brand may now be forgotten from the minds of your customers.

  • Churn help your competitors

Desperate clients tend to be vocal about why they left a brand. Negative customer reviews are a gift to your competitors. Since positive customer referrals can often make or break a deal, negative referrals are powerful ammunition for your competitors. And your competitors don't hesitate to use it again and again with new prospects. Those volatile customers may come back to close the next deal and stop your source of income.

  • A high churn can indicate a bigger problem

A high churn indicates that something is failing in your customer relationship. Is your product or service failing to meet client expectations? Does your customer orientation process need improvement? Do you devote enough attention to your clients? Even if the high churn rate stems from factors beyond your control, it can hurt your company and products.

  • Churn reduces your value

The churn rate is an essential factor in how investors view your company. VC firms look at customer churn to determine if your product has an edge in the market, and retention rates are critical to Software-as-a-Service (SaaS) public appraisals.

Smart SaaS investors use Customer Lifetime Value (CLV) as a metric to predict how much profit you will make and analyze the company's health. A high churn rate reduces CLV and can drive investors to doubt the strength of your business. So, if your churn rate is high, you are more likely to displease investors and deselect yourself.

Strategies to Re-engage Customers Before Churn

If you have identified the warning signs that your customers are leaving your company, you must act quickly.

If you need help re-engaging and retaining users who have previously moved and to build a re-engagement strategy, here are some tips:

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  • Understand what causes customer churn

The key to successfully re-engaging inactive customers is figuring out why they lost interest. There can be many reasons for poor customer satisfaction, including poor initial experience, poor customer service, inability to understand product benefits, etc.

Knowing your problem area will make it easier to eliminate or fix it. One of the easiest and most cost-effective ways to understand your customers is through email surveys. Carefully prepare your questions and submit them to understand what customers don't like about your product and service and how you can solve the problem.

  • Meet customer needs

Once you know what causes customer dissatisfaction or confusion, you need to develop a re-engagement strategy that is tailored to the points of customer complaints. You may want to have a specific approach for customers who don't get value from your product or service and a different process for those who don't find customer service helpful.

So make sure to listen to customer feedback, tailor your offer accordingly, and resolve issues before generating customer churn.

  • Reactivate users with push notification

Luckily, it's easier to reactivate a churned user than get a new one. Reactivation uses the same tactics as engagement for the most part. And for the most part, customers refrain themselves to leave you. So you can still contact them via push notification or email.

  • Educate your customers

Sometimes there may not be anything wrong with your app. Your churn problem may arise from your users not being aware of all the app's benefits.

It is easy to overcome by offering users free webinars, tutorials, product demos, or feature guides of your app. Send them an invitation via push notification to learn more about how your app can benefit them, and direct them to guided content via a dedicated link.

  • Introducing the loyalty program

Introducing a loyalty program gives customers new opportunities to benefit from your brand. And while win-back incentives may not work for all, long-term loyalty initiatives may be vital to retaining customers.

You can invite customers with an email campaign on the site, social media, or mobile messages. By enrolling customers in a loyalty program, you encourage them to visit more often, explore your products and services, and engage with your brand in exchange for valuable loyalty.

The Takeaway

There are different re-engagement tactics for different types of customers. People lose interest for various reasons, so there has to be a different approach.

Understand why your customers are not interacting with or using your product, then decide on your action plan. Remember that they used to be so interested in your product that they bought it. Interest can be rekindled: pay close attention to the signs your customers are giving you and do your best to win them back.

One way to win back your customers is to offer them a loyalty program that fits their needs. Tada is the best loyalty & reward platform in the market that can help you companies retain better customers through solutions such as digital membership, subscription, referral and also wide range of reward catalog that will pleased your customers.

Tada also offer smart campaign feature that will allow you to run win back program through messaging easily. Request our free demo now to find out more how our platform can be a great help for your business.

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Content marketing specialist