Email Strategies to Reduce Your Customer Churn Rate

Whatever you call it — attrition, defection, turnover — customer churn is not precisely a happy metric for any growing business to evaluate. However, it is not something to be ignored as it helps you understand the pulse of your customer base.

Simply defined, customer churn is the number of customers who have stopped transacting with you over time. It is a metric for evaluating the growth of your business over a defined period. Specifically, it's a metric that tracks the loss of growth.

While you invest a lot of time and effort in acquiring new customers (and you should), your actual business revenue comes from the existing ones. It will surprise you that just 20% of purchases made by your loyal customers comprise 80% of your business revenue.

Research across different industries suggests a 5% increase in customer retention and can improve your profits by 25% to 95%. That is a huge figure — one you cannot overlook if you are looking to build a business that is sustainable and prosperous.

Keeping churn rate in check

Existing customers are assets you would not risk losing but retaining all your customers is not possible. So the next best option is to keep your churn rate in control.

Customer churn rate is a simple calculation of the number of customers lost against the total number of customers in a specific duration. You can calculate it on a monthly, quarterly, or annual basis. Here is a simple formula to remember:

churn rate= number of lost customers / total number of customers

Customer churn rates go up in the absence of relevant information and reduced engagement. Identifying reasons for churn and customer dissatisfaction allows you to adopt corrective measures. If done at the right time, you can re-establish bonds with your customers.

Email for reducing customer churn

Keeping them engaged through regular and relevant communication helps build customer loyalty. Email is a reliable customer engagement channel for rebuilding trust. And contrary to popular belief, it is not dead. Do you know it fetches an ROI of $38 for every $1 spent?

Email marketing allows you to deliver delight right into the customer’s inbox. You can personalize the experience by offering need and preference-based solutions. Here are eight email strategies to reduce customer churn rate and earn more long-term customers:

1. Segment and personalize your database

Take out the time to go through your customer lists. Then, segment them based on customer activity, buying habits, and even customer support queries. Finally, identify changes in engagement levels in each segment and look for signs of churn.

Customers who have recently reduced or stopped engaging with your brand are your target audience. Suggest a solution to a problem these customers might be facing to retain them.

Create personalized emails with relevant offers and suggest products they may be interested in based on their buying behavior. Find a hook that helps you capture their attention and influence their shopping decision. Research extensively to identify their pain points or concerns.

Netflix, for instance, enhances the customer experience by sending personalized recommendations over email.

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Their exhaustive database is not easy to navigate and may sometimes overwhelm viewers. Personalized movie suggestions ensure viewers spend more time watching content on the platform than searching for it.

2. Create value

We understand “creating value” is a common marketing tip, but it is an important one. Customers lose interest in your offering when it is unable to solve their problems. This does not always mean your product is ineffective.

They may reduce usage or discontinue subscriptions if you do not guide them appropriately. Share relevant information over email from your knowledge base to educate them.

Let us take a general example. Digital transformation provides you an opportunity for understanding the modern-day buyer, engaging with them, and delivering on their expectations with a sensitive customer experience.

Similarly, email can be used to teach your customers the value of your product or service. You see, nothing would matter if they are unable to understand and benefit from all its features.

Chances of attrition reduce when customers know how to use your product properly. Salesforce directs new users to their educational resources to help them make most of their purchases. These emails help build long-term relations by offering guidance.

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3. Be grateful

Thank your existing customers for their business and create the much-required personal connection with them. Such emails will get your customers thinking about your brand all over again. Plus, send them emails to drive them back to your website and improve retention rates.

You can also include coupons and custom offers for a more effective campaign. Grammarly, for example, sends celebratory emails to thank customers for their continued patronage. The email also gives customers a time-restraint upgrade offer.

The discount may attract more leads to your website. The company achieves three targets with its email:

1. i) It gives its customers a soft nudge to upgrade their current plan and opt for premium services.
2. ii) It boosts brand recall to redirect disinterested customers to their website.

iii) It builds long-term relations with the customers as they are remembered via email.

4. Learn from your customers

No, seriously—feedback from your customers can give you an insight into their needs. You can reduce customer churn rates by involving them in the process. Send them short and direct survey emails to understand their expectations.

Analyze and implement the feedback to improve your products and services. Catering to customer needs helps improve retention rates. You can track customer behavior by sending them feedback emails regularly and recording their responses over time.

Even if they choose to stop using your services, their feedback will let you know what you can improve. Unsplash, for instance, sends crisp feedback emails that tell customers they are working towards improving their platform.

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The email design is not fancy, but the copy assures the user that their feedback matters and that Unsplash is genuinely interested in improving their service. Although the number of questions being asked can be reduced, it is still counted as a win.

5. Send reminders

Retaining customers has never been easy but make sure you give them several reasons to stay. Prevent churn through proactive communication. Let them know beforehand if their subscription or trial period is nearing the end.

Send them reminders and help them understand what will happen to any information they have shared with you. Brief them about the next steps if they choose to stay. Tell them the benefits of an upgrade and how they can get the best experience of your service.

A personalized email detailing the workflow will help them make better decisions, and they may most probably decide to stay.

Basecamp sends an end-of-trial reminder email to its users. The email gives customers an understanding of the next steps in case they want to buy a subscription.

They also share easy ways to contact their customer support, which instills confidence in customers and improves retention rates.

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6. Reward their loyalty

‘Giving’ strengthens relations, and the same applies to your customers. Incentives and rewards make them feel special. Thank them for choosing to transact with you and incentivize their loyalty through timely marketing activity.

Send them an email describing what they get and how they can use it to make the most out of their reward. It is not just the freebies but also the importance you give to your existing customers, lowering the attrition rate.

Starbucks, for example, sends elaborate emails under its reward program. It clearly explains the reward workflow and the incentives. In addition, their email lists down all incentives and even the event on which customers can avail themselves.

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Choosing the customer’s birthday to incentivize them adds personalization and boosts customer excitement when engaging with the brand. When they feel happy, chances are they are going to keep coming back to you for your service.

7. Do not let their interest fade

Notice the drop in interaction and resolve it in time. Be proactive. You can identify at-risk customers by studying customer engagement trends. Segment customers who have lost interest in your products and are likely to turn away.

Create custom offers to make them feel special and use personalization to avoid churn. Birchbox uses the approach well, and they are open about their process. Their emails state that they devise their offers based on customer preferences.

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That strategy only increases the order numbers. Plus, multiple incentives in the form of discounts give them more options to interact with your brand.

8. Prepare content that interests them

Different people consume content through different channels. Some might prefer reading through informative manuals, while others like to watch explainer videos. Customer churn increases when a user is unable to get the best of your products.

Therefore, create self-service knowledge bases and provide customers easy access by sharing links over email. Take help from any marketing or SEO consultants to identify the most relevant topics for your customers. Shopify does it brilliantly in this email to guide the customer to set up an online store within minutes.

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The video breakup allows a user to watch the relevant section of the video with just a click. It is a simple gesture that saves time and eases the process for the customer. Who would not be interested in spending time on Shopify? No wonder it is doing so well!

Email to reduce your churn

Exactly! Nurturing existing customer bonds through well-designed email campaigns improves customer retention rates. Plan your content and customize it to meet specific customer needs. Identify the right time and frequency for sending emails to each customer segment.

Avoid sounding pushy and try to solve a problem a user may be facing. Instead, simplify the product adoption stage to help them get the best results for continued patronage. Appreciate their loyalty and reward their consistency for strengthening the relationship.

Upgrading your email strategies by making them customer-oriented will reduce the customer churn rate over a period of time. Be consistent and do not be afraid to experiment. What do you think?