How to use marketing automation to reduce your churn rate

By Noa Eshed
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Introduction - reduce your churn rate

An incoming lead is an important milestone in the buyer's journey. You probably know where and when that journey begins but are you in control of when it ends? Are you focusing on nurturing your leads and forgetting to nurture your customers? Consider this - if your churn rate is higher than your growth rate, you're lying to yourself and essentially generating income from new customers and then flushing it down the drain by overlooking customer retention. The good news is that customer retention can be automated to a certain extent. Here are some quick evaluations and tips which can help you reduce your churn rate and break out of a destructive loop.

Awareness is the first step to change – calculate your monthly churn rate

A company's churn rate is the percentage of customers who stop subscribing to a service in a given time frame.

There isn't one method of calculation - in-depth drill downs could provide a picture that is more precise. Yet the general equation for calculating your monthly churn rate is very straight forward:

monthly churn rate = number of cutomers lost/total amount of cutomers at the start of the month

If for example at the beginning of October you had 100 customers, then lost 5, your churn rate would be 5%.

5/100=5%

In this example, if you're not acquiring at least 6 new customers a month you're either not making money or worst, losing money.

Throw in the fact that it's cheaper to retain a customer than to acquire a new one and the need to take customer retention actions becomes a no brainer.

Stay on your customers' mind

Now's the time to point out that there's no marketing cure for sucking. Make sure that your product lives up to your promise to your customer or else it doesn't justify its existence. Assuming that's a given - engagement is the name of the game. Neil Patel makes a strong point:

"However you choose to define it, engagement matters. Why? Because a customer who doesn’t use your product isn’t going to keep paying for your product. Think about it. If you pay $90/month for a home cable subscription, but nobody in your home uses it, you’re going to cancel. Likewise, if your customers are not engaged — not using the service for which they are paying — then they will cancel.”

Marketing automation drips to the rescue

A drip campaign is an automatic campaign utilized to send certain information at a certain order and time. Sending could be via email, SMS or any other channel. For the sake of simplicity, let's focus on emails and see how we can maximize them to reduce churn rate and keep your customers interested and engaged.

There are many online tools you can use to set up automatic email drip campaigns. MailChimp and Autopilot are great solutions for quick wins. More sophisticated solutions are provided by marketing automation pros such as HubSpot and Marketo yet the simple solutions more than suffice for creating the following drips:

New customer welcoming drip – provide your customers a proper welcome onboard. Send new customers a series of personalized emails:

  • Welcome them
  • Explain how to use your product (you can arrange and label the info as a short and friendly course)
  • Invite them to sign up for your newsletter, social networks, etc.

Recurring dates drip:

  • Your customer's birthday
  • Anniversary
  • Holidays and special events

Information drips for upcoming product features

Membership renewal drips – send renewal incentives to customers nearing the end of their membership.

Integrate your product with your marketing automation tool and create product action triggered events. Some ideas could be:

  • Product action follow up email asking for feedback or providing more information about the action conducted
  • Sell other features
  • Re-engagement emails to inactive customers after a certain time of inactivity, offering incentives and answering FAQs
  • Send coupons as loyalty rewards
  • Say goodbye when a customer leaves, ask for feedback and provide incentives to reconsider

 

How To Create An Effective Inbound Marketing Strategy Call to Action

 

Learn from the pros

Here are some great examples of companies using marketing drips for customer retention:

This welcome email send by project management SaaS Asana clarifies the clear benefits of the tools, invites them download the app and to learn more. It's simple and actionable.

asana dashboard

Dropbox send emails to customers who aren't engaged, this email is personal, friendly, clarifies the product's benefits and educates them:

dropbox page

Godaddy is known for their superb customer service. A simply customer service follow up email lets the customer know that they care:

godaddy page

This is a great creative example of Taskrabbit taking advantage of an occasion which isn't an obvious opportunity.

taskrabbit email

Make sure to structure your emails correctly, and note that utilizing automatic email drips do not grant you a pass to ignore your customers on a personal level. In addition to automation make sure to apply these 7 customer retention tips that are miserably overlooked.

Bottom line

Use your churn rate as a key KPI. Make sure to pay attention and evaluate how you can constantly improve your customer's overall experience. Put yourself in your customers' shoes, be creative and ask yourself how you can utilize automation to maintain the best possible relationship with your clients and engage them. 

If you found this useful, and you're curious to learn more and find out how to create a long lasting Inbound Marketing strategy, we invite you to download our How-To guide for creating an Inbound Marketing strategy

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About Noa Eshed

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Noa is the co-author of the Amazon no.1 Bestseller "The Smart Marketer's Guide to Google AdWords." She's a content lover, certified journalist & lawyer (Hebrew U). She practices martial arts & yoga. She's been consulting and helping businesses create a significant presence online since 2010.

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