As a customer service rep, you’ll likely have to deal with losing a customer. You may feel pressure to talk them out of it, and your company might even have a script you have to follow with these customers.
Before even needing to have a conversation, though, how do you know who these customers are? Below, we’ll discuss the signs that will help you identify a customer with potential churn, and how you can respond when it happens.
Signs You’re Losing a Customer
Some customers stop doing business with you out of the blue, but most show warning signs. Let’s go over five critical signs you should know.
1. You stop hearing from them.
If a customer is consistently in contact but you stop hearing from them, you may be at risk of losing them. There are various reasons less contact may mean churn, but a common example is that a customer is reevaluating what works for them and their needs and they’re working to find an answer before they reach out to you again.
On the other hand, a customer you stop hearing from may not be in this place at all — they could be extremely busy, or may simply be sick. Whatever the reason, if a customer's contact pattern changes, reach out to them to get clarity on the situation.
2. Your point of contact’s situation changes.
If you have a DRI you communicate with whose situation changes, you may be at risk of losing them. For example, if a new person fills a role after your client leaves their company, they may not see the same value in what you offer as their predecessor did, so they seek other solutions.
If you’re made aware ahead of time that something like this may happen, it’s best to get as much information about a replacement or next steps so you can develop a plan to re-state the value you provide and make a case for continuing the relationship.
3. Payment patterns change.
If a customer's payment pattern changes, it could be a warning sign. For example, maybe the budget they once had has changed, funds are allocated elsewhere, or they’re needing to convince whoever signs the check that continuing to pay for your product or service is worthwhile.
Whatever the reason, a customer whose payment pattern changes is likely considering if continuing with your product or service is worth paying for. Reach out to clients that display this, ask for clarity on the situation, and make a case for continuing your partnership.
4. Consistent complaints.
If you’ve found that certain customers are spending more time asking for help, calling with upsetting feedback, or are frustrated with your product or service, it might be a sign they’ll churn. Consistent complaints should be a warning sign, as customers are likely contemplating the true value you provide them.
In this scenario, it’s best to pay special attention to the customer and get to the root of the issue and send them on the right track with your product before it’s too late.
5. They tell you.
The most surefire way to know you’re at risk of losing a customer is that they flat out tell you. This doesn’t leave you to do any digging because they’ve let you know exactly what is going on.
The good thing is that a customer who feels they can tell you they may step away is likely a customer that is willing to hear you out. Understand why they’re considering leaving and present a value proposition that shows the continued success they’ll have with you if they stay.
Cost of Losing a Customer
The true cost of losing a customer is different for every business, but it boils down to this: spending more money.
Customer acquisition is significantly more expensive than customer retention for any business. In fact, loyal customers represent 20% of your customer base but drive 80% of business, and existing customers are 50% more likely to try a new product and spend 31% more than new customers.
As such, retaining all of your customers leaves your business better off revenue-wise. If you’ve noticed increased churn or the potential for increased churn, read on to discover how to address it.
How to Respond to Losing a Customer
- Analyze why customers are leaving.
- Tell the user what tools and features they'll lose.
- Offer discounts when necessary.
- Make it easy for a customer to step away if they decide to.
- Communicate what happens to their data and information.
- Say thank you.
1. Analyze why customers are leaving.
The best strategy for handling future customer churn is understanding why past customers have left.
To do this, send customer feedback surveys to clients that have left to understand their experience. This gives you valuable information about roadblocks customers encounter that consistently cause problems or specific features that don’t deliver results as promised.
Your reps can learn from this feedback and be sure to highlight these areas with customers to ensure they’re addressed before a customer even experiences them.
2. Tell the user what tools and features they'll lose.
When you’re talking to a customer you may be at risk of losing, it’s important to be upfront about the features and tools they’ll lose.
This doesn't necessarily have to be a script where you ask, "Are you sure?"
Instead, it could be a conversation that sounds like, "Okay, no problem. We just wanted to let you know about the tools and features that you’ll no longer have access to if you leave."
After hearing what they'll lose, customers might decide to change their mind or ask to talk to a sales representative to find out about possible discounts.
3. Offer discounts when necessary.
At the Ritz-Carlton, customer service reps have a discretionary fund of up to $2,000 a day to provide an excellent customer experience. You might think that’s over the top, but it empowers employees to provide a positive experience with customers that have shown signs of leaving or have outright said so.
Your company may not have the budget to do that, but it’s important for your reps to feel empowered to make decisions that will improve the customer experience.
For example, if a customer has expressed that they’re unsure about whether your product or service is still meeting their needs, your rep can offer a discounted rate for the next pay period to give the customer a chance to process their decision.
You’re still providing an excellent experience, even though they’ve mentioned stepping away. This type of service can also inspire customers to rethink whether they want to leave because you have shown a commitment to caring for their experience with you.
4. Make it easy for a customer to step away if they decide to.
One of the most frustrating customer experiences I've had is when I'm trying to figure out how to leave or close an account with a business and there's no information on how to do so.
As such, it should be clear and easy for customers to figure out how they can downgrade their account with you. For example, HubSpot has a knowledge base article on how to downgrade from a paid subscription. Providing this information gives customers the tools they need to decide for themselves and follow through with it.
5. Communicate what happens to their data and information.
A customer that has expressed a desire to leave may be curious about what happens to their data after they step away. It’s an important part of the conversation because you may have valuable and confidential business information that needs to be protected.
If this comes up, clearly communicate what the process is for handling customer data once they’ve left, helping the customer make an informed decision about how they want to move forward.
6. Say thank you.
You appreciate all of your customers. Given this, an important thing to do is to say thank you to a customer, especially if they step away. They’ve given you business and helped you grow, so you should let them know you appreciate them.
Expressing your thanks, if genuine, can leave the customer with a positive impression of your business, which may inspire them to keep an open mind to doing business with you again in the future.
In a perfect world you’d retain all your customers. Since that’s not realistic, it’s important for your service reps to know the early warning signs of customer churn, and how to address customers that are at risk of moving on from your business.