In today’s business climate customer churn is one of the most important metrics for measuring the health and profitability of a business. Especially for SaaS companies, increased or decreased churn can be the deciding factor for determining profitability.
Reducing churn by 5% can increase profits 25-125%. (Insight Squared)
What is churn? Churn is when a customer ends their relationship with a company. Every business, in every industry, is affected by churn. And in today’s growing landscape of subscription based services, reducing churn is even more critical to overall success. The time it takes the sales team to acquire new business is costly and if these customers continually turn over – the sales team’s efforts are meaningless. Because of this, understanding why churn is taking place and how to minimize it is crucial.
Why do customers end their relationships with companies? Customers will cancel or choose not to renew their subscriptions, or terminate their relationships with vendors for a number of reasons. Dissatisfaction with the service, cost, etc. are all factors that influence churn rates. However, one reason not typically addressed is employee turnover.
Almost 70% of the identifiable reasons why customers left typical companies had nothing to do with the product. (Insight Squared)
When the employee that championed the service or started the relationship with a vendor leaves the company, many times the company doesn’t renew or discontinues the service. This can happen because their replacement is unfamiliar with the service or because they already have a relationship with another vendor. If the sales team were notified of the departure of their contact, they could proactively reach out to the account to develop a new relationship – and reduce the chances of churn.
11% of customer churn could be avoided if the business simply reached out to the customer. (Kolsky)
With SifData sales teams can utilize Salesforce to notify them of employee turnover within an account. Once the sales team knows that their champion has left the business, they can proactively reach out to the business for the opportunity to retain the account.
It costs 5 times more to acquire new customers than it does to keep current ones. (Insight Squared)
Contact us to learn more about how SifData can help reduce churn for your business.