What is your customer retention percentage? Is it around 95% on a monthly basis? If so, this may seem like something to be proud of – until you do the actual calculation. Having 95% of customer retention means 5% of churn every month or 60% every year. In order to break even every year, you probably replace your 60% of your revenue. Even if you have 98% of customer retention, you still have 2% of churn rate, which still turns out to be a quarter of your revenue every year.
The best-run organizations can have up to – 2% of churn rate every month. Yes, you read right! That’s negative 2%. Of course, they make more revenue every month and don’t have to replace a certain percentage of their revenue to break even.
But how? You may wonder!
Because of the high customer success rate! The customers who choose to stay with them purchase and spend more on their services that what the organization loses from other customers who choose to leave.
If you are an entrepreneur, you better take customer success as imperatively as product development, sales or marketing. The better customer success rate you have, the more revenue you earn.
Here are some rules that you can follow to up your customer success game:
Make Customer Success your Core Growth Driver
Every business might be different from one another but most of their customers come from one major source i.e. word-of-mouth, whether you use referrals directly to close the deal or use testimonials or case studies. This not only assures your recurring revenue but also help you upsell amounts and referrals.
Use Customer Success Metrics
The whole point of customer success is to boost net negative churn. But how do you measure your churn rate? In order to know whether you are achieving what you have planned or not, you need to use customer success metrics.
Take Feedback from your customers in person
You may not know that 96% of unhappy patients don’t complain, however, 91% of those will quietly leave and never come back. You never get to know what made your customers leave until you personally talk to them and take feedback. Your personal visits to your unhappy clients can actually make all the difference in changing their attitude towards your company and figuring out their problems.
Customer success is even more important that marketing & sales
Marketing or sales may be your top-most priority but marketing or sales are just the beginning of a long-term relationship between you and your customer. To make your sales function well, you would eventually need resources such as testimonials, case studies, and references. Often, business owners do a good job in closing a particular deal, but that ultimately goes down the drain since they get busy closing more similar deals instead of taking care of the deal closed before. Remember, you may close hundreds of deals but you will never achieve customer success if you keep ignoring your existing customers.