The last metric we’ll mention is customer acquisition cost. The more you spend on acquiring a new customer, the more impact your churn rate has on your profitability. By reducing your churn rate, you can reduce your overall CAC.
Improving loyalty and reducing customer churn
Why is there customer churn?
Let's look at some possible causes that can affect customer churn:
Attracting the wrong customers
Many customers sign up for a service without fully understanding whether it’s right for them and whether the service they choose meets their needs. These customers are more likely to leave your company and go to one of your competitors.
To prevent customer churn due to poor fit, make sure you are targeting the right customer segments , that you know exactly what their needs are, and that your services will be able to meet those needs over the long term.
Price list
This is one of the most common attributes that can make customers reconsider your services. Effectively vietnam phone number data and appropriately pricing your products can have a big impact on customer retention.
If your product is too expensive, the customer may switch to one of your competitors. On the other hand, if your product is perceived as too cheap, the customer may lose confidence in your ability to meet their needs and help them solve their problems.
Customers no longer see the value of your product or service
If a customer sees high value in your product/service, they are most likely willing to invest a portion of their budget in it. However, the moment they start to see a lack of promised value, they may quickly cut you off from their budget spending.
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