We’ve all heard a lot recently about the great 2021 Covid job churn, where pandemic burn-out is triggering a turnover tsunami amongst employees.
We are also starting to see the great Covid customer churn. Right now, many customers are either switching or considering switching providers, seeking better deals or service. Without doubt, Covid is a catalyst for change and customer loyalty is hitting new lows.
Businesses with a subscription model such as banks, telcos and utilities are less obviously impacted by Covid than their retail and hospitality counterparts. However, impacts will still be felt at a slower pace and with a longer tail, as evidenced from other global markets who experienced Covid lockdowns well ahead of New Zealand.
Why is 2021 the year that businesses will likely see their customers changing providers at unprecedented rates?
1. Consumers are more budget-conscious
Many of your customers have added financial strain due to Covid. In NZ, up to 44% of individuals live in a household where members have experienced Covid-related job and/or income loss. This is coupled with recent inflation and interest rate rises. Consumers are shopping around, and customers also have more time to fill out forms and switch providers.
2. Bill shock
As behaviours change, so do consumption habits. People are confined to their homes for long periods, meaning more power and phone usage and bigger bills. Even software is being consumed in different ways and customers are shopping for a better deal on everything – except perhaps Netflix.
3. Time to ponder
Customers are planning for a future with more time at home, which could involve a renovation or a pool, requiring a home loan or even shifting house. Who has the best deal out there?
What can brands do to help plug the big customer exodus?
It costs 5-20 times more to acquire a new customer than to retain an existing one so customer retention should be the number one focus. Here’s how you can help keep your existing customers:
1. Look for the signs
Brands need to be more connected than ever with their customers, and to be constantly monitoring for early warning signs that their customers may be considering a switch. Your data will tell you all you need to know about your customers’ state of mind. At-risk customers should be flagged as such the minute they exhibit any behaviours or triggers suggesting they may not be happy. And because a loyal customer can switch in an instant, at-risk identification should be “always-on”.
What’s more, your customer churn modelling will give you a deep understanding into your customers – what makes them happy, unhappy… and unhappy enough to leave. Therein lie your customer insights and marketing gold.
2. Take action
Contact your customers proactively if you see a trigger or a change in behaviour. Ensure your customers are on the right plan. If they are not and you know it, suggest a better plan for them. Give them something for nothing. Reward their loyalty. Your churn models need to integrate with marketing automation, to ensure you can action and save at scale.
3. Make it easy
While we are all about the outbound contact and being proactive, you also need to make it easy for a customer to contact you. And this is not as easy as it should be. Many businesses have now all but done away with call centres. Enter the bot and Facebook messenger, where your conversation history frustratingly wipes after a few hours. If a customer is unable to reply immediately, then they need to restart the conversation. It's critical for your customers to be able to tell you when they need help or are not happy.
How do you keep the love going in these times of turbulence?
Managing customer churn during COVID-19 could be the biggest challenge many businesses have to face.
At Data Insight with over 8 years experience working with clients to develop churn models, we have developed DI retain; an ‘always on’ churn prediction and save tool.
DI retain collates your internal customer data, and augments this with additional proprietary data, such as home movers and rental changes. Our predictive models not only tell you which of your customers are at risk, they go one step further to explain why customers are likely to leave you, giving you the insight you need to take action to save them.
This data integrates with your marketing automation tool to proactively contact customers as they become at-risk and the AI algorithms are constantly learning and refining the churn model over time based on real results.
You don’t have to be Netflix to retain your customers during these turbulent times. You just need a solid plan and the data and tools to support and execute this to ensure your customers stay and continue to love your brand.