How to Prevent Customer Churn in eCommerce- Free Proven Tips

Introduction

Customers are the crux of the entire retail industry. Naturally, it is crucial to maintain your customer base to stay in business.

However, customer churn severely threatens your e-commerce business revenue and profits. Despite the severe nature of the issue, most e-commerce stores have no strategy to prevent customer churn, running themselves out of business.

What is Customer Churn?

In layman's terms, customer churn in e-commerce refers to the rate of loss of customers for your product or brand during a given time.

Also known as the rate of attrition, the customer churn rate plays an essential factor when it comes to the revenues of your quarter.

While there is a simple formula to calculate customer churn rate, what's more important, is keeping this rate at a stable position that is profitable to you and your business. 

The easiest way to boost your customer retention rate is by integrating specific measures into your business strategy.

Top 10+ Ways to Prevent Customer Churn in eCommerce

1) Investigate the reasons behind customer churn

It is essential to know your customer churn rate, but you also need to understand why your customers are churning, severely affecting the size of your customer base.

Comprehending the reasons behind the issue isn't a product of guesswork but statistical analysis based on collected facts and data.

One way to manage the customer churn rate data for your e-commerce business is by asking the customers to provide a reason for cancelling their subscription or sending them automated personalised exit emails. 

2) Collect customer feedback periodically

Keeping your buyers engaged can be a difficult task as an e-commerce business owner. However, you can increase your customer interactions by collecting their feedback on product quality and service periodically after purchase.

Giving them the ability to comment about each delivery through in-app chatbots and surveys makes it easier for you to pinpoint the issue. It improves the efficiency of the complaints process. 

3) Identify your flaws

After collecting customer feedback, segregate the different reasons for customer churn in your e-commerce business and identify the areas where you can improve the buying experience for your customers.

You can also use this inventory to find product faults and correct them before more customers are affected.

4) Maintain transparency with customers

One of the most crucial measures an e-commerce business can take to keep the trust of its customers is to be completely transparent about the procedure. If the customer reports an issue, acknowledge it and update them about every step of the complaint resolution process.

5) Don't over-promise and under-deliver

While it may sound enticing to offer one-day deliveries or full refunds in case of any issue with your product or service, do not make promises to your customers that you cannot keep.

When your products and customer service do not match up to the expectations that you guarantee, your brand value and word-of-mouth will suffer greatly. 

6) Incentivize buying

To keep your customers returning to your e-commerce business, offer discounts and upgrades on their purchases. Free promo codes and loyalty rewards go a long way in ensuring that your customers stay on board for the long run.

7) Provide long-term subscription services

E-commerce businesses which offer products and services often run on customer subscriptions. You can boost your customer retention rate by providing quarterly, bi-annual or annual subscription offers tailored to your customer's needs.

Subscription services to your e-commerce store give your customers enough time to realise the benefits of your e-commerce business and allows you to focus on improving your product instead of channelling the workforce on customer retention.

8) Improve customer service

Customers don't remember a business only by its products but also by how they are treated. By providing exceptional service, e-commerce businesses can form a good reputation in the market and increase their brand value, reducing customer churn.

9) Market your strengths

The growth of e-commerce business has facilitated stiff competition in the market owing to the variety of choices offered to the customers. Rising above your competition can be a difficult task.

However, using marketing techniques that highlight the unique selling points of your ecommerce business can help in reducing the number of customers who churn and associate your business with the services that you offer. 

10) Monitor third-party review sites

Asking for customer feedback through in-app chatbots or cold emails isn't enough; you also need to monitor the comments posted by your old and current customers on third-party review websites to identify issues and faults that need to be corrected.

They also help demarcate those customers most at-risk of churning, after which you can provide them personalised benefits for retention.

Third-party sites are also an effective way of monitoring what people think about your competitors and help you strategise a successful plan to raise your profits and expand your customer base.

11) Settle negative feedback immediately

In an e-commerce business, mistakes in product issues or customer service are inevitable, souring the purchase for your buyers. When a complaint is reported, swift action improves the buying experience for the customer.

Streamline your customer interactions by treating all adverse reports as urgent and resolving the issues as quickly as possible. 

12) Go the extra mile

Reducing your customer churn rate can be a harrowing journey. Build a rapport with your customers by exceeding their expectations and offering quality service. Define milestones for your e-commerce store and thank your customers when you hit one.

Showing your gratitude through dedicated social media posts, personalised emails, and constantly staying in touch with them for their support will set your business apart from other e-commerce businesses which do not engage with their customers.

Key Reasons for a high customer churn rate

To implement the strategies mentioned above, it is essential to understand why customers churn out of your e-commerce store.

While it is true that each customer has their own unique experience with your business, the most common reasons for a high customer churn rate are enumerated below.

1) Product quality issues

When the products that you advertise do not satisfy the requirements of your customers, they opt out of ordering from your business. Poor quality products act as a deterrent to buyers and drive them away from your business.

2) Poor customer service

The buying experience of a customer defines whether they would like to continue business with your store or not. When your business offers a poor retail customer experience, you will likely lose business with them.

3) Unaffordable pricing

Offering good quality products with exceptional customer service will not boost your sales if the products you market to a particular audience are unreasonably expensive. Your customers will keep churning if they find cheaper alternatives to your product, costing you your revenue.

4) Unresolved complaints

Brands which do not resolve the complaints of their customers experience a higher customer churn rate owing to a lowered brand value and rapport in the market.

5) Losing to competition 

When your competitors offer reasonably priced, better quality products with good customer service and incentives, you will lose a significant chunk of your customer base as buyers will churn out of your e-commerce business for better alternatives.

Consequences of Customer Churn

A high customer churn rate not only cuts back your revenue and profits but also lowers your brand value and increases customer dissatisfaction.

Even if you prioritise customer acquisition over customer retention, the costs will far outweigh the benefits. Customer churn is a gruelling process, both for the customer as well as your business, which ends up demoralising your employees too.

Conclusion

Fortunately, you can analyse your customer churn metrics to determine the reasons for customer churn and implement strategies to reverse the process.

Using your customer churn analysis is critical to the growth and expansion of your e-commerce business. How you use this data to improve customer experience proactively will determine the success of your e-commerce business.

FAQs

1) How do you prevent angry and unhappy customers from churning?

The key lies in keeping your wits about you and analysing the reasons for their resentment. Once you know the issue, decide on your course of action and inform them about the solution after apologising for the inconvenience caused. Resolve their complaint immediately and make sure that their grievances are adequately addressed.

2) How do you determine your e-commerce customer churn rate?

Your customer churn rate is measured by the ratio of the number of customers who left your e-commerce business in a given period to the total number of customers buying from your store at the beginning of the period. 

3) What role do social media platforms play in reducing churn rate?

Social media bridges the communication gap between your business and your customers by providing a medium for engagement and informal conversations. You can even collect feedback from the churned customers casually and work out a plan to reduce this churn rate accordingly.