Many marketing departments are currently prioritizing the acquisition of new customers with interesting marketing campaigns via influential channels. The metrics of marketing automation tools show exactly when interested parties decide in favor of the product or company during the buyer's journey. However, it is just as important for marketing departments to keep an eye on existing customers. After all, loyal existing customers are important for the development of your brand, but above all, selling to them again is also significantly cheaper than acquiring new customers.
An important tool for gaining a better insight into the behavior of prospective customers is the customer journey. With precise customer journey mapping, you get a step-by-step insight into the customer journey that shows you when they leave the sales funnel. This also gives you a better understanding of how to prevent customer churn.
Customer churn detection, analysis and prevention
One measure of customer churn is the churn rate. "Churn" means "to stir up" or "to expel"; the telecommunications industry coined the term as a combination of "change" and "turn" to indicate that prospective or existing customers want to switch providers.
The churn rate indicates what percentage of your customers have not placed any new orders over a certain period of time or, most importantly, have canceled existing contracts. How can such churn be prevented? In many cases, you can identify the most important reasons at an early stage.
Less communication - lower click-through rate
The first warning signal is a lack of feedback. In closer B2B relationships, it is usually a lack of communication, with B2C customers you are more likely to recognize the first signs of potential churn through a low click-through rate.
For large B2B customers, a direct channel from and to your sales department is often worthwhile.
If your emails are no longer opened, your posts are no longer seen and the links are no longer used, you should set other incentives.
Changes in purchasing behavior
Customer churn as part of the customer journey often sounds like a conscious decision. However, the signs often increase rather slowly. For example, are customers reducing the number or quantity of goods? Are they ordering less frequently from your online store? These can all be signs of lost interest or a tougher competitive situation.
Changed competitive situation
One of the most frequently cited examples of customer churn in the context of e-commerce is Amazon Basics. With its generic brand, Amazon creates a monolithic competitor that is favored in the search results of its own platform and also offers very favorable prices.
Many companies have already had negative experiences with this; the mere existence of an Amazon Basics product can lead to the migration of their own customers. Of course, your company may also face competition from other providers of a similar size. In both cases, it may be worth reorienting yourself on the market and sharpening your own profile.
Complaints, returns, negative reviews
In addition to factors such as incorrectly set target groups, an insufficient advertising budget or a low return on investment for influencer campaigns, the core product itself can unfortunately also be largely responsible for customer churn. Declining or stagnating quality, costs above the customer's pain threshold, changes to the sales model or a lack of service can all have undesirable consequences.
The consequences become apparent at an early stage, e.g. trends in ratings and complaints can be identified quickly. It is important to analyze the feedback in terms of content and sentiment.
Customer journey mapping as a tool for sustainable customer loyalty
Customer journey mapping (i.e. creating the map) refers to the process of recording the customer journey step by step as a matrix and preparing it visually. This allows you to view the above-mentioned sensitive areas of customer loyalty separately. This allows the overall experience with your company to be broken down into many sub-experiences.
The change of perspective, the point of view, is essential for the customer journey map. Instead of thinking from marketing to the customer, take the customer's position and interests and go through the touchpoints up to conversion.
However, if we think about customer churn, we need to go even further. After all, the path from qualified lead to conversion should ideally lead on to becoming a brand ambassador - customers like these generate new customers through their publicized satisfaction.
If we (roughly) divide a customer journey map into five parts, you can quickly see that the experience is linear from the perspective of the individual, but becomes cyclical when viewed as a whole.
Five stages of the customer journey map
- Awareness - Interested parties receive information about your company, for example through advertising, sponsored posts, influencers or friends.
- Interest - Once potential customers are aware of your company/product, information is obtained and external expertise is researched. Price comparisons and discounts are also an important part of the customer journey at this point.
- Conversion - Purchase decisions are made in this phase. Shortly before the conversion, digital retargeting and reminders play a role, triggers can also be set through offers and, of course, this is followed by a follow-up.
- Experience - This includes reviews as well as suggestions from your company about related products and, of course, support.
- Loyalty - In the final step, you have loyal existing customers who provide positive feedback and thus brand your company through word of mouth. Through high quality, excellent service and a sociable social media experience, you can incentivize this step in the final phase of the customer journey.
More satisfaction and more loyalty
In principle, classic customer journey mapping also follows the AIDA principle of awareness, interest, desire and action. However, what was once just a rough overview is now turned into a clear recommendation for action with the help of data and analyses in real time. Thanks to modern analysis tools, you can identify weaknesses in the customer journey map at any time and retain existing customers at low cost.
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