Q: We’ve seen a lot of customer turnover lately in our IT service business. We keep adding new clients every month, but we aren’t seeing an increase in the amount of contracts we have. How can we reduce customer turnover, so we can effectively grow our customer base?
You’re certainly not alone in this. Every managed services business experiences customer turnover or churn at some point, and they’re all trying to reduce their churn rates. Reducing the number of customers you lose each month can help you exponentially grow your MSP business by making it easier to steadily add new clients to your customer base — instead of just replacing the ones you lost.
The key to reducing churn is focusing on the little things. In fact, you can reduce churn rates by 6 percent just by offering your customers a tutorial for product and service features. In contrast, simply failing to respond to customers on social media increase your churn rate by 15 percent.
To help you dive deeper into how to reduce your customer turnover, we talked to David Kern, one of the partner success managers at Barracuda MSP. David shared his tips and advice on how to reduce churn and address customer concerns before they even think about moving to a new provider.
Reducing customer turnover
To successfully reduce customer turnover, check in with your customers often. The best time to contact your customer was yesterday, and the second-best time is today. Set-up a 10-minute weekly check-in with them and ask the same questions from week to week. If there is any change or issue that comes up, focus on fixing it before your next scheduled call.
If you’re juggling a large number of customers, though, a weekly call might be too much. Instead, think about setting up a quarterly business review. This allows you to check in on a frequent basis and see what’s new. Set aside a half hour or so to really dive into every aspect of what they’re experiencing. Are there any issues or concerns? You should also ask what their plans are for their business. They could be adding new members to their staff, looking to move to the cloud, or developing a business application.
In addition to the quarterly reviews, set up notifications to reach out to your customers at the right times. This could include reminders about holidays, notifications about missed backups, and more. If you check in when things are going well, it will make it easier to reach out when some challenges come up.
Best practices for stronger customer relationships
The customers you already have are the best customers to grow your business with. They trust your opinions and value the relationship, and when you go to them with new ideas, it’s easier to get them on board. Plus, they can be great advocates for your MSP business! The best way to reduce your customer turnover is by keeping customers happy. Here’s how you can do that:
Don’t be a stranger. Email customers, call them, and visit them. Just like you, customers like to feel like they’re valued. Remind them how much you value their partnership and check in regularly to show you genuinely care. After all, if you’re not calling your customers, someone else is—usually your competitor.
Ask for feedback. When you check in, make sure customers are happy and ask for their honest feedback. Sometimes you’ll need to be blunt. Ask them what’s working, what’s not, and what you can do to improve.
Give them free things. Have some company swag with your logo on it? Share it by sending it your best partners. Not only is it free marketing for your brand, but it’s usually something your partner will appreciate. If you don’t want to give out promotional items, let them test out a new product or service for 30 days.
Be friendly. You need to make a friend before you make a sale, and that holds true for current customers too. Build a relationship with each customer and get to know them. Do they have kids? Do they like sports? Do they travel? The more you know about your customers on a non-business level, the easier difficult conversations can be. If you only call them to sell them something or tell them something is wrong, chances are they won’t want to take your call.
Don’t lie. If something isn’t working, be honest about it. If you lie about something and the customer leaves, that could be very damaging to your business. If things aren’t working out and you’re honest about it, you can at least shake hands and part as friends.
If you follow David’s advice and check in with your customers often, you’ll be able to detect and prevent problems from happening. And if an issue does come up, having a good relationship will give you the opportunity to fix it—before they start looking to move to a competitor. Reducing customer turnover takes some work, but it will be well worth it when you build a strong base of customers who love you in the end.
Photo: Odua Images / Shutterstock.