What Kind of Clients Are at Risk?
Consumers who may be in danger of switching to a different product or service, quitting the company, or ending their business connection altogether are known as at-risk consumers. This affects client attrition and may result in significant losses for the company, mainly if one of the at-risk customers is a crucial account.
Multiple factors could lead to a consumer being deemed “at-risk”:
- Financial situation: Changes in a customer’s financial situation, such as decreased cash flow or higher expenses, may make it more difficult for them to renew their current contracts or purchase new services.
- Reorganization of the company structure: External factors like shifts in the market, laws, or industry standards may require a company to reorganize. This reorganization may result in less advantageous conditions or additional consumer requirements.
- Shift in consumer needs: Some customers may move to a different supplier or product as their needs and preferences change.
- Poor customer experience: Customers are more likely to defect and seek out another supplier if they have a negative experience with the business (for example, poor customer service, subpar products, etc.). According to a PwC study, over one in five consumers will quit following a negative encounter.
- Unfavorable press: A company may lose clients and discourage current ones from returning if it is the subject of negative press in the media for whatever reason, including claims of fraud or maltreatment of employees.
Consumers considered to be at risk aren’t always dishonest; they could struggle to fulfill their responsibilities or require more assistance. Occasionally, factors outside their control contribute to the danger of customer attrition.
Because of this, keeping customers is an essential component of every business plan. Businesses can prevent customer churn by proactively identifying high-risk clients and taking steps to retain their engagement and loyalty.
Businesses can take action to reduce risks before a consumer decides to leave when they identify potential risks. This could entail giving customers discounts, adding more services or support, or spending money on cutting-edge solutions that better suit their needs.
Synonyms
- Churn Risk: The relative risk that a customer will move away from a business’s product or service.
- Risk of Attrition: The risk that a customer will not renew their relationship with a business.
- Churn Threats: The potential risks that could lead to customer churn.
- Unsatisfied Customers: Customers who are at risk for churn because they are frustrated or unhappy with the product or service provided.
Determining Clients Who Are at Risk
A business may suffer significant losses in predictable revenue due to at-risk clients. Businesses must first determine who their at-risk clients are to successfully implement customer success initiatives.
When identifying these accounts, businesses consider several factors.
Unfavorable Evaluations
A client will likely not sign their contract if they leave unfavorable comments or evaluations about the business on social media or review platforms.
Unfavorable reviews are typically published in open forums where the company can monitor them. These are from the software-as-a-service (SaaS) industry, including G2 Crowd, Trustpilot, and Capterra.
As a warning to potential consumers, individuals occasionally submit customer complaints on social media sites like YouTube, TikTok, or others.
Insufficient Engagement
Clients who do not communicate with the business via social media, email, or phone run the risk of quitting. This can mean they’re searching for a better option because they’re dissatisfied with their current offering.
Typically, an inactive client will engage in one or more of the following actions:
- Stop interacting with information on the company’s website
- Ignore their account manager or customer success team
- Stop responding to emails
- Close marketing messages.
- Spend a lot less on the goods or services offered by the business.
Businesses may detect at-risk clients by monitoring certain customer habits before it’s too late.
Help Tickets
When clients open support tickets, it usually means they are experiencing a problem or concern with one of the company’s goods or services. Numerous indicators of client attitude are available in customer support tickets, such as:
- Problems with a good or service
- Grievances over the goods or services
- Inquiries regarding the use or accessibility of the good or service
Businesses can also examine additional customer data points within the support chat, such as the client’s satisfaction level, the time it took to respond, and whether the issue was remedied.
Businesses can even use sentiment analytics offered by specific help desk software to determine whether consumers are satisfied, angry, or outraged. Employing keywords also helps organizations identify precisely where clients could be confused or dissatisfied.
NPS, or net promoter score
The Net Promoter Score (NPS) is used to gauge client loyalty and satisfaction. On a scale of 0 to 10, customers are asked if they would suggest the good or service to friends, family, or coworkers.
The scale functions as follows:
- 0–6 is regarded as a turnoff.
- 9–10 is seen as a promoter
- 7-8 is regarded as passive.
According to consumer survey data, if an account is a turnoff, it may mean the customer won’t be around for long.
The NPS computation is a simple procedure. To calculate the percentage of promoters vs. detractors, sum up the values of survey replies.
For example, if you had a 30% promoter and 10% detractor rate, your NPS would be 20 (30-10=20).
Surveys measuring customer satisfaction (CSAT) gauge customers’ happiness with a given good or service. Customers are asked to review their experience using stars, smileys, or other visual indicators on a scale of 1 to 5.
This is how the score operates:
- A score of 1-2 is deemed inadequate.
- Three is seen as neutral, and four to five as satisfied.
- The CSAT score is the percentage of happy customers (i.e., those with 4-5 ratings) divided by the total number of customers polled.
- For instance, your CSAT score would be 80 if, out of 100 respondents, 80 indicated they were happy (4-5 rating).
Monitoring online communities using social listening
Social listening techniques are the most effective means of monitoring unfavorable feedback. With the help of this kind of business software, companies can keep an eye on discussions about their products and brands on review sites like Yelp and Google Reviews, as well as on social media sites like Facebook, Instagram, and Twitter.
Businesses can receive notifications whenever their firm and its products are mentioned by creating alerts for keywords associated with their name or product. This can assist businesses in promptly identifying disgruntled clients and taking appropriate action to resolve any concerns before the client chooses to go to a different provider.
Interviews with Exits
Traditionally, exit interviews have been used to gather information from clients who have decided to leave a business. Businesses might inquire about customers’ experience with their product or service, the reason for their departure, and how they could have enhanced their offerings during the interview.
The customer success team can use this knowledge to identify future at-risk consumers better and create more effective solutions for other customers.
When shared with the sales and marketing teams, data from exit interviews can be used to inform future marketing campaigns, sales interaction strategies, and customer segmentation.
Formulating a Customer At-Risk Plan
Engagement with customers is not a one-size-fits-all strategy. Businesses must determine the essential traits of their at-risk clients and create customized plans for each customer group to create an effective at-risk customer strategy.
Map The Perfect Customer Experience
The first step in creating a successful at-risk customer strategy is sketching the customer journey. It assists companies in determining the stages that customers take while doing business with them and identifying the points at which customers are most likely to become dissatisfied or stop doing business.
Usually, the customer journey starts when a prospective consumer looks for a good or service to address their needs. After considering their demands, they investigate the available options during the purchasing process and decide which good or service to buy.
Following their decision-making, they will proceed with the purchasing procedure. This entails completing the purchase forms, making the required money, and obtaining setup or usage instructions.
Following a successful purchase, the client uses the good or service and, if necessary, gets in touch with customer success or support. Customers typically have a renewal time after this, when they can stick with the brand or go with a different supplier.
Monitor User Activity Information
One of the most crucial variables that companies should monitor when developing an at-risk customer strategy is customer behavior data. It offers insightful information about how clients use their goods and services and any possible problems or areas needing development.
There are various ways to keep an eye on user behavior:
- Product use; • Website visits; • Customer support tickets
- Using social media
- Internet evaluations and product rankings
Businesses can determine which services are most popular, where customers get stuck, and what needs to be improved by using data from both offline and online behavior.
Boost Efficiency in Operations
Members of a business can collaborate to develop a more effective and streamlined customer journey if it is clear where customers encounter problems and where improvements can be made to its product or service.
The following are the most typical domains of operational efficiency:
- Customer Onboarding: Customers may give up and move to a different supplier if they lack the necessary resources and knowledge to use a product or service. Similarly, unclear expectations in the onboarding process can result in disgruntled clients.
- Customer service: Clients should feel confident that their questions and problems will be promptly and satisfactorily resolved. Furthermore, 83% of consumers are more devoted to businesses that pay attention to them and solve their issues quickly. Help desk software and chatbots can help firms answer consumer concerns faster and more efficiently.
- Marketing Strategies: Companies should make sure their messaging is precise, concise, and catered to each type of customer. This aids clients in appreciating the worth of the good or service and how it will help them.
- Integration and Scalability: As a company expands, it will either continue to employ software that grows with it or replace it with a more suitable solution. The better a product or service is, the more third-party integrations and scalable features it has.
- Product Usability/Functionality: The company’s product is challenging to use, and customers will locate another that suits their requirements. In this instance, the company should modify the product to improve its usability for the intended market by adding or eliminating pointless features.
- Pricing: One of the critical components of a loyal client base is product pricing. Unexpected charges, hidden fees, and pricing adjustments might cause consumers to give up on a good or service. Customer retention rates can be raised by competitive pricing, which involves studying the industry and determining prices to stay competitive.
Businesses can increase operational efficiency and foster a customer-loyalty culture by significantly improving the customer journey.
View Customers Who Are at Risk
For an opportunistic customer, risk does not automatically indicate the relationship is doomed. Companies ought to view these clients as a chance to deepen their relationship with them and prevent them from leaving.
Companies can tailor win-back campaigns to the unique requirements and concerns of their most valuable, at-risk clients. Personalized communications, polls, and loyalty programs can all be used to accomplish this.
Re-engagement campaigns can be used to offer discounts, special offers, or other incentives to inactive consumers to get them back.
Encourage At-Risk Clients to Succeed
Engaging consumers who are at risk of leaving regularly is crucial. Companies must be proactive in interacting with them, providing assistance and support, and resolving any issues they may be experiencing.
Organizations must comprehend customer feedback to know what customers think, both positively and negatively, about their product or service.
Businesses should react promptly and sympathetically to unfavorable reviews or support tickets.
Decrease Involuntary Turnover
Involuntary churn happens when clients cannot pay for a service because of insufficient cash, outdated information, or inaccurate payment information. It also occurs due to money-related problems, like a lack of flexible payment choices.
While some of these are the client’s responsibility, companies must take preventative measures.
Companies can lower involuntary churn by:
- Updating customers on billing changes or new payment options
- Offering flexible payment plans to customers in difficult financial situations
- Improving the dunning process by sending reminders when a payment is due
- Automating the billing process with a platform that monitors customer accounts for potential problems and sends automatic notifications or emails when needed
