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The economy appears buoyant for some industries, yet many companies are experiencing customer defections and revenue loss at a rate that concerns the C-suite.

Line of business and sales leaders readily offer reasons for losing a customer or revenue stream, but they struggle to identify systemic issues or at-risk customers.

Here are a few straight-forward actions that firms can take to combat customer churn:

1. Understand why the churn occurs

Don’t rely solely on sales or operations teams to explain why revenue walked out the door. Instead, an independent resource should talk to defecting or lost customers to understand why they are leaving.
You may have to consider a 3rd party to conduct a lost customer interview to understand what happened objectively. If you manage it in-house, ensure it is someone skilled at asking questions, listening, and conducting lost customer interviews. It’s not as simple as asking, “Why are you leaving us?”

And please, don’t send an email exit survey.

2. Identify At-Risk Customers

Some customers are always more likely to leave than others, so it’s in your best interests to know who they are sooner rather than later.
Start by asking the sales and operations team to identify a sample of at-risk accounts. There are several ways to do this, but start with a simple list of account names and a rating between 1 and 5, where five is the most at risk. Have them include a few sentences explaining why they think the account is at risk to frame the conversation during a review of at-risk accounts.
After analyzing the at-risk factors, you may observe attributes or actions that churned customers took. This insight will help you anticipate at-risk accounts based on similar behavior.

3. Profile your most valuable customers

They deserve special care because they generate the most revenue or grow the fastest. You should segment your customers into groups of profitability, at-risk rating, and their likelihood to retain them. This segmentation will help you better predict customer churn.

4. Pay attention to complaints

Complaints are like the tip of the iceberg — they might suggest that a more significant part of the problem is hidden from view. Research indicates that 96% of unhappy customers don’t complain, and 91% of those will leave and never come back.
Take complaints seriously and act on them, and in this way, prevent customer churn. Dissatisfied customers whose complaints are attended to are more likely to remain loyal and even become advocates than other average customers.

Preventing customer churn and lost revenue requires a multifaceted proactive approach, one that does not need to be complicated to get off the ground.

Proactive evaluation of at-risk accounts is essential to reducing customer churn. Don’t wait for a contract renewal event to determine if customers are at-risk.

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