How to solve the high user churn rate? Here are 10 strategies

Many companies have not developed specific plans to activate silent users and recall lost users. Some companies try to replace lost users by acquiring new users, while others spend a lot of time analyzing the problem and trying every possible way to prevent user loss .

Before discussing the methodology for reducing user churn, we first need to understand how user churn is defined.

01 What is user churn?

User churn refers to the number of users who leave your product within a specific period of time. The time period varies depending on different products and businesses. The user churn indicator indirectly indicates the product's ability to retain users. Companies will pay a heavy price for the massive loss of users.

02 Let the data speak

When it comes to the impact of user churn, a research institute has done statistics and found that the cost of acquiring new users is five times the cost of retaining existing users. A report from Harvard Business School also pointed out that a 5% increase in user retention rate can lead to a 25-95% increase in profits. There is also data showing that retained users are the main contributor to corporate revenue.

According to data from US consulting firm Gartner, 20% of retained users will contribute 80% of a company's future revenue. At the same time, the probability of successfully selling a product to retained users is 60-70%, while the probability of successfully selling to new users is only 5-20%.

The above data show that reducing user churn and improving user retention are the most important and beneficial for companies (especially e-commerce companies).

03 What adverse effects will user loss have on the company?

(1) Reduce corporate revenue and affect corporate performance;

(2) Reduce corporate profitability;

(3) Increase corporate marketing and user recall costs.

04 There are 10 strategies to reduce user churn

1. Analyze users to identify reasons for user churn

Why do users churn? The answer still needs to be found from users, and the most direct way is to talk to users. Telephone follow-up is the fastest way to communicate with users. By calling users, we can find out which pain points our products have not solved, what troubles we have caused them, and so on. In addition to telephone follow-up, we can also find out the reasons for user churn by sending emails to users, inviting users to leave comments on the official website, or interacting with users on social media .

2. Keep users engaged

Keeping users engaged can go some way towards preventing churn. To keep users engaged, we need to continue to prove to them the value of our product. In addition to letting users know the main features and updated content of the product, we can also show users new transaction information, special offers or recent promotions, etc.

In the past, face-to-face communication was the main way for users to participate, but new research data shows that websites and social media are gradually becoming the main channels for users to participate.

Getting new users involved in your product is also a great way to reduce churn. For example, we can ask new users about their first impressions of a product, which helps us understand the initial impact the product has.

3. Provide users with adequate guidance

Reducing user churn can be achieved by providing users with high-quality guidance/support materials. These guides include but are not limited to free training, online forums, video guides or product demonstrations, etc. Good product features coupled with sufficient guidance not only give users the tools to solve problems, but also give users a guide to use the tools. We maximize the potential of our products and services, making users feel that we value them enough and making it difficult for them to leave our products.

4. Find users who are on the verge of churn

By analyzing the behavioral data of previously churned users, we can summarize some common behaviors of churned users, such as they were not as active as before in the period before churn, they asked us some questions before churn but did not get our feedback, etc. By discovering these common characteristics, we can predict users who are on the verge of churn and take appropriate measures to retain them.

5. Identify high-value users

It is very important to identify high-value users and prioritize their needs because our revenue is primarily contributed by these high-value users. There are two ways to identify high-value users: one is to analyze the user's engagement at each stage of the product life cycle , and the other is to group users based on their behavior . We can consider the user groups that are highly engaged at each stage of the product life cycle and frequently make purchases as high-value user groups.

When analyzing user engagement and the behavior of different user groups, we can not only identify high-value users, but also users who are on the verge of churn. That is to say, while identifying high-value users, we can also predict users who are about to churn.

6. Motivate users

There are many measures to motivate users, such as promotional activities, points redemption, etc. Before taking incentive measures to retain users who are on the verge of churn or to recall churned users, we must ensure that the cost of these measures is lower than the profits these users contribute to us. We cannot waste a lot of manpower and financial resources to win back users who will no longer contribute a penny to us.

7. Identify your target users

In "As a product manager , do you really understand data analysis ? 》In this article, we mentioned product vision - the product must identify the target users. After all, if we choose the wrong target users, we will not be able to keep them even if we try our best. If we attract new users by using words like “free” and “cheap”, the new users we acquire may not be our target users at all. These users who collect freebies are the group most likely to churn. Our target users should be those who value the long-term value of our products, rather than those who are looking for small profits.

8. Provide better services to users

Poor service will lead to customer churn. There are two main reasons for customer churn: incompetent and rude employees, and intolerably slow service. More than 70% of lost users are due to poor service.

The above picture is enough to prove the importance of user service. Any service that makes users dissatisfied may lead to user churn.

9. Pay attention to user complaints

The product problems exposed by user complaints are just the tip of the iceberg. The survey shows that 96% of users will not say anything even if they are dissatisfied with the product, and 91% of them will leave permanently without saying a word. Only 4% of users will express dissatisfaction or comments about the product!

This shows that we must take user complaints and complaints seriously and provide feedback in a timely manner. Research shows that users whose complaints are fed back and resolved are more likely to become loyal users, and these loyal users can spread our products or services and form a good reputation.

10. Demonstrate our competitive advantages

We need to make users understand how we are different from our competitors; what makes us stand out; and what users will miss if they don’t use our products. Once we figure out these issues, we will know what our competitive advantages are. Once you understand your competitive advantage, you can start promoting it!

The author of this article @Cobub compiled and published by (Qinggua Media). Please indicate the author information and source when reprinting!

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