Customer churn is a serious problem for any business, and it doesn’t matter what your industry is. The fact is that it is always far more costly to acquire new customers, than to simply retain and keep current customers happy.
Table of contents
The good news is that reducing customer churn can be quite straightforward if you understand the main reasons behind churn. Even better yet, most of these can be improved through smart utilization of email marketing.
Understanding customer churn
Before we look at why email marketing helps with most of the issues that cause churn, let’s try to understand churn in general. We’ll look at why it is crucial to reduce customer churn, but also the dynamics that cause churn in the first place.
Why reducing churn is a priority for any business
If your business suffers from unnecessary churn, you essentially have a business where you constantly take two steps back for every one step forward. All of your other efforts and investments will be made fruitless, regardless of how good you get at acquiring new customers.
First, understand that even if you change nothing else in your business, reducing churn will dramatically improve your bottom line. That means more money to invest in other areas of your business and a higher self-reliance on your own success as fuel for further growth.
Next, understand that churn does more than just “reduce potential profits from additional sales with existing customers”. If people are choosing to move on, some are likely to recommend against you to future potential customers. They can become the equivalent of anti-evangelists, which can cause brand damage.
And finally, if you’re looking to get more funding or investors for a startup, realize that investors look to your LTV metric to know whether your business is worth investing in. Whilst you might think you can look impressive by focusing on more acquisition to grow the “total number of customers”, serious investors will not fail to notice if retention is lacking.
What causes churn in the first place
If you’re reading this, I assume that you know the basics. As you might guess, a bad quality product, low quality service and unreasonable prices are the obvious reasons for churn.
However, my guess is that you’re not dealing with any of those issues. I’m here to talk to you about the less obvious, yet more important sources of churn. These are also the issues where email marketing can help.
The fact is that most churn out there happens because customers feel undervalued, unappreciated or disrespected. This is often due to a sense that the business doesn’t care about them, their opinions or thoughts.
At other times, it is because the business seems to just make decisions without communicating with its customer base. Customers just keep noticing major changes in how the business, service or pricing works, without any communication with the customer base.
Why Email Marketing Is The Best Way to Reduce Churn
Let me ask you something: can you tell me the main reason that email is the single best performing channel out there? You’ve probably heard the stats and you understand that email has the highest ROI out of anything else in marketing. But do you know why this is the case?
As it turns out, the reason for this efficiency has to do with the fact that email as a channel has a uniquely intimate nature. This in turn allows you to engage with customers and build relationships in a way that is simply impossible through any other means.
I think you’re probably starting to get where I am going with this, and how it relates to reducing customer churn. This is why we discussed the main issues that lead to customers moving on. As you can probably tell, building relationships based on giving value and quality communication can alleviate all of the main issues that lead to customer churn.
That includes those feelings in customers where they feel ignored, underappreciated and undervalued.
Email Strategies That You Need To Implement Today
If you are looking to reduce churn, you probably want to see some more specific action steps and strategies that you can implement straight away. So let’s talk about what you can do, starting today. These are the steps I think every business should implement without too much hesitation or delay.
All of these are simple and effective, at least if applied in a minimalistic way to start off. This is something we always recommend. Whilst everything in email marketing can be taken to a very advanced level and complicated to an nth degree, it’s always wise to start with the basics and implement things with an “80/20” philosophy. So let’s look into how you can do just that.
Basic personalization is a must
As we discussed, a lot of the time customers move on because they feel unappreciated. Now, the good news is that you don’t have to personally reach out to every customer to show you care. Obviously that wouldn’t be practical, nor scalable.
The fact is that personalization can do a great job in giving customers a sense that they matter and that they are valued. And the even better news is that you can get most of this effect even by utilizing very simple personalization.
Whilst at Emercury we support the ability to get as fancy and advanced as you want, it is generally a good idea to to start off with the simple basics. Even if all you did was implement basic merge tags to address people by name, you would start to see a difference in engagement.
But then, as an Emercury user you have one more option. As you might know we introduced the “Smart Personalization” feature which allows you to get a lot more personalized in a simple way. If you haven’t tried it yet, this might be a good time to do so.
Segmentation matters
This one is kind of huge both in general terms, but also in terms of reducing churn. Customers simply do not like it when your emails feel like “bulk mail”. That is, if your emails apply to everyone and no-one at the same time, everyone feels equally under-appreciated.
Fortunately, with a platform like Emercury, implementing segmentation can be especially fun and easy. Just fire up the advanced segment builder, and have fun segmenting your list based on any combination of traits that you like.
When you do that, you can then make sure to communicate differently to different personas on your list, and that goes a long way in building better relationships that result in trust and loyalty. To learn more about segmentation, feel free to check out or guide on utilizing market segmentation for maximum profitability.
Automate the most important relationship-building moments
There are certain points in the customer journey where communication on your part matters a lot more than otherwise. The first point is when they initially join your list. This is a point in time when they are most likely to open your emails, and act on them.
This is why we always recommend every marketer implement an automated welcome email sequence from day one. It will kickstart the relationship-building process in just the right way, and lead to much better overall outcomes.
However, it doesn’t have to stop at the welcoming period. You can identify other milestones in the customer journey and build sequences just like you would for that initial welcoming period. For example, you might have an automated sequence for when someone first buys one of your services, or upgrades to a higher tier.
The idea is to really think about the moment when there is an upgrade in the relationship, and build sequences to capitalize on these moments.
Implement winback and re-engagement campaigns
Sometimes the relationship with customers goes stale and they stop engaging with your content, no matter how valuable. This might be for a variety of reasons. It doesn’t even have to mean that your service or product is lacking.
For example your customer runs a business and at the time they signed up, they were really keen on experimenting with a service just like yours. Later on, they decided to prioritize other things and simply deprioritized the kind of thing you offer.
Whatever the case might be, it is always a good idea to identify the un-engaged segments in your audience (both leads and customers), and try to win back their engagement. When it comes to leads, this can increase the number that convert in customers. And when it comes to customers, re-engagement can result in less people moving away from your services.
If you want to learn more about this, you can check out our guide: How to Make a Killer Re-engagement Email Series and Win Back Lost Subscribers
Plan time-sensitive communication well in advance
This is something we have to talk about if we’re interested in reducing customer churn. The fact is that a lot of businesses get carried away with “working on the business”, to the point that they forget to put themselves in the customer’s shoes.
It is easy to become obsessed with developing a new feature, new service or improve the product in some way, at the detriment to communication with customers. And it is especially easy to do this if you feel the thing you’re working on is going to be really valuable to customers, and to their benefit.
Unfortunately, I too often see this kind of attitude leading to higher customer churn as customers mistake this for “being kept in the dark”. It can lead to a sense of being under-appreciated and like their input and opinions do not matter.
Now I realize I am being kind of vague, but knowing what to communicate, how much, and how early depends on the exact nature of your business. Please note that some of our higher plans include one-on-one consultations, so look into this if you’re looking for more specific guidance.
In either case, to get more specific here, I would say that you just need to ask yourself “would a customer be upset that we didn’t care to communicate with them about X”. Especially if this is something time-sensitive, where communicating relevant information earlier would have made a difference for the customer.
As long as you make a note to think about customers and when to send out broadcasts with relevant information, you will do fine. All it takes is a little planning and a little forethought.
Focus on giving value, Aim for engagement
Focusing on valuable content is advice that you will get in general if you want to become a successful email marketer. However, there are some specific ways in which it also applies to customer churn.
The first is that sharing valuable information with your audience creates engagement, which in turn builds trust and appreciation for your business. This can alleviate many of the things which we discussed as sources of customer frustration and churn.
In addition however, there are some types of value-driven email campaigns that are especially relevant to improving customer engagement, satisfaction and retention. For example, one type of campaign that we always recommend are educational sequences.
This is where you educate the customer on how to get the most out of your service. Aside from being valuable content in general, it specifically works to increase perceived value for your product. That in turn increases retention and reduces churn.
We discuss more on this in two of our very popular guides. First, in The 12 Automated Emails You Need To Implement in Your Business, but also in 15 Ways to Use Emercury as a SaaS. Note that a lot of the advice in the latter is useful even if you’re not a SaaS per se, but any type of business which involves retaining customers.
Test, Measure, Iterate
This one is probably the most important point on the list. In fact, you can look at this one as “The multiplier”. All of your other efforts to boost retention and decrease churn will pay off much higher dividends if you test, measure and iterate.
In fact, this is the one “magic process” I like sharing with anyone that I consult with. If you want to make any aspect of your marketing-top notch, just adopt this strategy. The trick is to track the appropriate metrics as you’re trying things out.
Then, as you learn more about how things changed based on your tests, iterate. This is just a fancy way of saying “try something else”. You keep doing this process until things cannot be improved any longer.
Oh, and as a bonus, this process is especially easy to implement in email marketing with a platform like Emercury. Unlike other channels with tons of metrics to look at, in email you have 2 golden metrics to track engagement.
This is your open rates and click through rates. You could also in addition look at unsubscribe rates and forwarding rates if you want to get even more precise. However, you’ll do an amazing job even if you only track your opens and clicks.
The good news is that tracking your open and clickthrough rates is especially simple with Emercury. In fact, a lot of people who move to Emercury tell us this is one of their favorite things about our platform. We make reports exceptionally fast and easy to look into, at a glance.
Get A Strategic Partner On Your Side
There’s no need to go at this alone. While we do put out a lot of free content to help you, nothing beats a one-on-one conversation. In these articles we try to help clarify things as best as possible. However, every business is different, so we have to generalize.
If you want to understand better how to implement email marketing in your specific business, let’s have a chat. At the moment I am still able to do some free demos, so be sure to book one while I can still do these.
I would love to hear about your specific needs, challenges and any confusion you might have about email marketing strategies. And then, help you see how you can use Emercury to improve your bottom-line.
Alternatively, or in addition to booking a free demo, you can also grab a username for our forever-free-plan while we still have it. It’s probably the most generous email marketing automation plan on the planet. We include almost every feature in this plan, with very few restrictions.
Remember, you get to keep this plan for life, for free… Provided that you grab a username while registrations are still open. Note that we might decide to pull this way-too-generous offering at any point. So click that link to check if we still allow registrations.
About Author
