Every business tends to increase their customer, and most of them focus on acquisition more than anything. Still, sometimes it does not work properly, and the more budget is burned, there is little growth. If you are curious to discover what it is, the myth behind you needs to learn more about customer churn. Here we explain what customer churn is and how seriously it could push business toward death.
Do not scare of failing your business, we have some effective strategies in our pocket for you to reduce your customer churn.
Having an e-commerce business, you need to know your threats to have good strategies to fight with. Although competition is sometimes serious, supplier costs or sky-high Customer Acquisition Costs (CACs) are headaches, but what kills most e-commerce businesses is customer churn.
Customer churn (customer attrition) is one of the vital metrics that help you understand how many of your customers have stopped doing business with you over a given time period.
A higher customer churn rate means you are closer to business death.
Many fortune companies have gone bankrupt because they prioritized new customer acquisition over customer retention.
ٰThey focus on gaining new customers over caring for existing customers.
The common thing among those businesses is one thing. They have a leaky bucket in their funnel. No matter how many customers they obtained, they were losing too many.
And a leaky bucket is a hole in your funnel where you lose your customer, which means losing revenue.
The question is how we could understand if our business has such a leaky bucket too.
Here are some signs that help you analyze your business:
Have burned some budget on traffic acquisition online on Google Ads or other social media channels, and you were successful in bringing too many customers with a low CLV (Customer Lifetime Value) that purchase once and then there is no sign from them…
Have not many enthusiastic customers waiting for your new products …
Then you have a leaky bucket which means a customer churn problem. So this article is a magical healing potion for your business.