Trying to nail down one exact reason why your customers stay or leave is really an exercise in futility. Whatever causes the change in your customers’ minds, though, creates churn for your business. And, yes, customers will invariably change their minds. As your business grows and evolves, so do your customers. Sometimes, these two things don’t always happen in parallel, though.

No matter how well-versed you are in retention marketing, you are never going to maintain a 100% retention rate. Point blank: customer churn is a normal part of business and should be factored into your planning.

When looking at churn, it is easy to consider it a bad thing. We like stability. Change brings uncertainty. The unpredictability of churn can make it seem like an unpleasant thing. When you reframe your perspective, though, you’ll see that churn is not something to dread, because change offers the opportunity for growth.

What is Negative Churn?

If you lose customers, but gain revenue because your remaining customers are spending more, that, in short, is negative churn. For the simple sake of math, say each customer represents one dollar and you make $100 a day. If you create changes that make 10 people leave, you would be left with $90 per day. If, however, those changes lead your remaining 90 customers to spend $1.25, you wind up with $112.50.

The result of your negative churn is a 12.5% increase in revenue!

How to Create Negative Churn

First, acknowledge that you will lose customers. You, at some point, will also lose more customers than you gain. Focus, then, should be on growing your revenue per customer. Let’s take a look at some ways to do just that.

Cross-Sells

A cross sell occurs when a customer buys an additional product that is related to their main purchase.

For instance, a customer is looking to buy some dinner plates, but also get some drinkware. They may not have necessarily needed the drinkware, but it went so well with the dinner plates, they had to have them both.

Cross-selling is about creating value. The customer is willing to spend more if they feel the value of what they are getting by doing so outweighs the cost of the additional purchase. When planning cross-sells, then, aim to keep the cost for the cross-sell lower than the price of the target item.

Up-Sells

The strategy of upselling centers around the ability to sell a customer a more expensive version of something they already own. The key is that the upsell has to offer additional value that offsets the increase in price. That value can be in the form of additional features, increased support, and the like.

For example, YouTube offers a free version that is supported by ads. For $9.99 a month, though, you can get ad-free streaming on YouTube and unlimited access to Google Play Music. The added value is in being able to circumvent unwanted ads, as well as gain access to a millions of songs, too.

Check your inventory to see where you have upselling opportunities.

Expanding Resources

Expanding resources is akin to upselling, but different enough to be its own category. Whereas upselling involves customers buying higher-end versions of a particular product, resource expansion occurs when customers need to use their existing product even more. If you offer a basic cell phone service with 3G of high-speed access, but a customer needs to move to the 10G package, that is an example of a resource expansion.

Resource expansion works best when it is built into the service or product from the start, such as more memory in a phone or different levels of product support.

Seat Expansion

This approach involves the promotion of additional, linear transactions that occur within the range of a product that the customers already owns and uses.

You’ll see this often in the computer software world. For some software as a service (SaaS) models, there are tiered packages for single users, small businesses, and enterprise-level users. The primary difference is the number of people (AKA “seats”) that have access to the software.

One way to bring more seats to the table is to introduce new features that would benefit users in a certain group that have similar, but not the exact same, needs as your core customers.

The key to making seat expansion work is to thoroughly explain the benefits that come with the ability to add extra users. For instance, if you are working on a project with five people and only three have access to a project management system, adding two more seats to the table can increase communication and save time.

Retention Marketing Strategies to Build on Net Negative Churn

It should be fairly obvious by now that not all of the above-listed strategies can be realized by direct-sales techniques alone. Carrying out a successful negative churn plan requires assistance from your retention marketing specialists.

At the core of retention marketing is the knowing what your customers need and when they will need it. The “when” is especially important, which is why predictability standards should be built into a retention strategy. If you push for an additional purchase before the need arises, it can be off-putting and possibly alienate customers. If you wait too long to encourage the additional sale, you could lose that customer to a competitor with better timing.

How do you build predictability models? In a word: data. If you aren’t collecting as much customer data as possible and analyzing it for trends, you are playing a guessing game. Once you start looking at data, you are likely to uncover trends that you hadn’t even considered. Customers are unique and the ways in which they interact with your products and services can vary tremendously from the ways you do or even the ways in which the products and services are intended.

When you have good data in your pocket, you can often see a customer need arising before the customer does. This allows you to be ready to solve the problem when the customer comes looking for an answer.

The Takeaway

It’s ideal to keep as many customers as you can, but that is just not reality. Forward-thinking businesses prepare for this type of churn with a well-thought-out negative churn strategy. Finding ways to get your loyal customers to spend at a percentage that is higher than customer loss can pave the way to growth.

It should go without saying, but any strategy should be about your customers first. By knowing their wants and needs, you can offer products and services to satisfy them. When their desires are fulfilled, your business grows in kind. Knowing what your customers want and need, then, starts with data and using that data to develop programs that pre-empt customer needs.