Is this the silent killer in your service business?
2 min read

Is this the silent killer in your service business?

quick question- ‘What do I need to do to ensure a customer never leaves?

This is the question I ask myself whenever I onboard a new customer and you should too.

Because in the service business space - there’s a massive problem that I see people run into on a regular basis.

And that's the churn rate…

Having to bring on more customers every single month than you’re losing to remain profitable (Or even to break even in some cases...) is not sustainable.

I decided to put together this email with the sole intention of helping you improve your customer retention rate. This is the real hidden growth lever most fail to focus on.

To start, I’d recommend setting a goal for the churn rate to be sub 5% per month.

To calculate your churn rate simply divide the total number of churned customers over the period (typically each calendar month) by the number of customers you had on the first day of the period.

On average most service businesses have a monthly churn rate higher than 5%. It is simply a starting point. You may be at 30% or 3%. Our goal is to improve and get that as low as possible because when this compounds over a year it is much more than you realize.

“But how is sub 5% possible?” I can hear you asking. Well, allow me to explain...

You need to cultivate an environment that makes your customers never want to leave.

And a sure-fire way to do this is to optimize the customer experience.

Over the years, I’ve leveraged a few tools that have helped me do this. And I'd recommend you take a look if you're serious about improving your customer retention rate.

  • The book📚 Never lose a customer again - I’d highly recommend picking this up. It shows you ways to impress and delight your customers throughout the customer journey. This will spark a lot of ideas.
  • Handwrytten - this is a super useful tool that sends handwritten cards to your customers with special touches that makes your customers feel special. You can even include gift cards and it has a Zapier integration.
  • PrintMe1 - This allows you to create a physical copy of your lead magnets and they send it directly to your customer’s doorstep. Imagine someone downloading your lead magnet PDF and then receiving a physical version with a note from you a week later.

On top of providing a stellar service (This is a prerequisite to everything of course!) - implementing these strategies will help you to chip away at lowering your churn rate and having a more sustainable business.

The devil is in the details with these resources. As they say, when you go the extra mile it’s never crowded…

That's all for today! Until next time,

Tyler

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