One of the best ways to grow faster is to slow the rate at which you’re losing customers, or slow your product churn. Churn is the percentage of customers who leave a product or service over a given period of time.
The end result is a percentage, so a low number is better. 100% churn would mean that you’re losing 100% of your customers from a given product or service in a given timeframe.
Here is how to calculate basic churn at the product level for a given period of time:
# Existing Accounts Closed During Period / # Accounts at Beginning of Period
Think of product churn as a hole in your boat. When you calculate the rate of churn on each of your products, it will become painfully obvious where the biggest holes are in your boat.
Depending on your overall strategy, the biggest holes can be a great place to start.
Once you’ve identified a product or service to begin with, you’re going to want to start communicating with people. And if you’re able to communicate over these six, distinct days after account opening, you should be able to learn what you need to do to reduce your product churn for that product.
So without further ado, here are the six days of communications you need in order to begin reducing product churn:
Day 1 – Account Opening Survey
Sending out a survey the day after account opening is probably the single most important thing you can do to start reducing churn. That’s why we’re doing it on day one of the product relationship. Surveying allows you to gain an understanding of your account opening process from the eyes of the customer and catch problems early. This knowledge will ultimately help you streamline the account opening process, so this day one survey is critical.
Day 2 – Account Specifics
Pack everything the customer needs to know about the account into this communication. And make sure that every detail is accessible. A great way to structure this communication is with an automated email that links out to key pages on your website with product details. But you can also pack everything into the communication for the customer to save and reference over time.
Day 14 – The Follow-Up
You should be thinking about following up two weeks into the product relationship. This can be over email or direct mail…but you just can’t beat the follow-up phone call for one big reason.
The personal touch.
Hearing the tone and inflection of the customer’s voice on the other end of the phone as they talk through issues or needs is extremely important. Schedule a follow-up phone call and start grabbing all of that context, while further strengthening the bond between the customer and their personal banker.
Day 30 – What’s Next?
We’re now a month into the product relationship and there are a number of “go-with” products that can and should be promoted. Be smart here.
An auto loan is not necessarily a “go-with” product for a new checking account. But direct deposit, online banking, and bill pay are. Think of products that can enhance the customer’s overall experience and only show them offers to products they don’t already have set up at this point in time.
This is an easy level of personalization that shows you know and value each of your relationships.
Day 60 – Ask for a Referral
It never hurts to ask, and it’s a great time to ask for a referral after you’ve taken care of the customer’s needs. It’s also a nice way to know where you stand with your customers…getting a lot or very few referrals is telling, in and of itself.
Throw an incentive for referrals into the mix and keep track of your conversion percentage over time. Similar to the survey after account opening, you can use referral percentages as a proxy to learn if you have deeper problems.
Day 90 – First Cross-Sell
This is the transition point into a perpetual, quarterly, or bi-annual cross-sell campaign. Keep in mind that your customers are probably looking at your financial institution through a specific lens. If their primary relationship with you is through a loan, then they’re looking at you through a lending lens. Great cross-sell offers would be other lending products.
However, if the customer’s relationship is primarily deposit focused, like with a checking account, then other deposit products make great cross-sell offers. Feel free to mix and match your cross-sell offers throughout the year, but work to make them timely and relevant to each individual customer.
Start Reducing Churn Today
These six days’ worth of communications over the first 90 days of the product relationship are crucial for reducing churn. We’ve built some best practice product onboarding schedules along with sample messaging that you’re free to download here.
You can definitely send these communications out manually, or enlist the help of an automated communication platform to do your dirty work for you.
Either way, here’s to a future with less product churn and more growth.