Business wisdom 101: Working to keep your customers is less costly than constantly acquiring new ones. Preventing customer churn is essential to maintain stability as you pursue growth. Plus, adding customers isn’t the only way to grow. You can also expand current customers’ spend. So, without further adieu, we’ll help you consider how to avoid the cost of client churn by answering these questions about predicting which clients are likely heading toward off ramps–and ways to redirect them.
Top Reasons B2B Clients Churn
At ClearlyRated, we live and breathe customer experience (CX), so we love to research what matters most to B2B customers. Over the years, we’ve pinpointed the most common reasons customers cite for replacing a B2B service provider. These include:
- Unmet expectations
- High cost for perceived service value
- Slow or unreliable communication
- Unhelpful staff
- Lack of B2B CX management
Take heart in the fact that most of these factors are service related. That means, they’re within your control. With an internal focus on delivering a positive CX through proactive communication and responsive customer care, you can better position your firm to retain its customers.
How To Identify At-Risk Clients
Understanding what leads to customer churn can help you prevent it, but you also need to detect which clients are likely considering and exit. Look for these five signs that your clients may be unhappy so you can intercede before their eyes wander toward your competitors.
1. They reference your contract terms (or worse, your competitors’ claims)
If your client feels they need to bring up your contract for any reason other than renewal, you’re in hot water. And if they bring up a competitor, it’s a sure sign that they’ve begun considering other options or at the very least want to put the pressure on your team to improve.
2. They’ve complained
This one is obvious, but worth noting because too often client complaints aren’t given the attention they deserve. Don’t get defensive. Instead, be grateful that the client has given you an opening to make things better. Fans of The Office will remember well when Jim and Pam committed to “having the fight” rather than rolling over and watching their marriage die. Take a cue from America’s sweethearts: Fight for your clients. Meet their complaints with an open mind and a willingness to make things right.
3. You receive little-to-no communication from them
While a silent customer can easily fall into the background amidst other squeakier wheels, pay attention! True, they may be just fine. Or they could feel frustrated, ignored, and ready to shop around.
4. They’re not spending what they used to
If regular spend is trending down, it’s a sure sign of a relationship that may be approaching its last breaths. Pay attention to customer spending reports and reach out to those with reduced their spend to see whether and how you can help to get things moving in the right direction.
5. They’ve given you a low Net Promoter® Score (NPS®)
If you measure your NPS, you know that getting a low score from one of your clients is a clear sign that they’re unhappy. It also means they’re likely to churn. In fact, our analysis of 3,700 clients of staffing firms over three years revealed that Detractors (clients that rate your firm somewhere between 0 to 6 on the NPS scale) are 56% more likely to churn than Promoters, which are your most satisfied clients.
Effective Strategies to Prevent B2B Customer Churn
Creating and maintaining a positive CX should be at the heart of your client retention strategy. You can do this by:
- Maintaining internal communication and sharing client information and feedback across teams
- Encouraging regular communication with clients and asking for feedback
- Responding quickly to address any complaints
- Setting up a quarterly business review (QBR) schedule
- Offering value-add services
- Acting as a consultative partner by sharing industry news and helpful content
Even the best firms experience customer churn. Here’s how to predict and prevent it:
1. Identify dissatisfied customers then address their concerns to win them over
Here’s a positive (and true) perspective: Service failures present an opportunity to build a stronger relationship than before. This is a well-documented phenomenon called the service recovery paradox. Our data shows after clients have experienced a problem followed by a resolution within 24 hours, they give their service provider a higher NPS than before. Here’s how to achieve that:
- Communicate internally
- Follow up with your client within 24 hours and show empathy with their situation
- Invite them to a meeting
- Ask questions to get to the root of the issue
- Create a recovery plan with clear expectations, timelines, and check-ins
- Ask if there’s anything else
- Recover with the individual (not just the company)
2. Capitalize on your happiest customers
While you certainly want to convert unhappy customers with service recovery, that doesn’t mean it’s okay to neglect your loyal ones. Happy customers, or Promoters as we call them, typically spend more with your firm than unhappy ones. They’re also more likely to help you grow your business by referring you to potential clients and boosting your online reputation with positive reviews.
To maximize the benefits of these customer relationships, actively communicate with and appreciate your Promoters. Continue providing exemplary service, and when they give you referrals, go the extra mile in thanking them for their confidence in your firm. By treating your Promoters like the star clients they are, not only will you retain them more easily but you’ll also reap the benefits of their goodwill when asking for testimonials, reviews, and referrals.
3. Measure and improve your CX
Without a way to identify Detractors and Promoters, the above advice is moot. That’s why many B2B firms use NPS customer satisfaction surveys. The data they get helps them measure and track their CX, and the qualitative feedback customers share can help them improve their services and keep up with competitors. Just remember: If you evaluate your CX using client surveys, make sure to maintain an open line of communication. Create and follow a post-survey action plan so your clients know that you appreciated their feedback, that you’ve listened and that they didn’t waste their time.
Want expert guidance in creating, managing and responding to customer surveys? Learn more about ClearlyRated’s NPS survey platform.
