Best Practices for Reducing ARR Churn with CS Platforms!

Annual recurring revenue is the success metric of a business that explains how well it has achieved its targets. One can calculate ARR for a particular product, project, or overall business and plan their success strategies accordingly. Now, this revenue is different every year. If you have been experiencing reduction, it is called ARR churn. It is the revenue or the amount you lost because of customers who unsubscribed or stopped using your services. Let us dig deeper and learn more about ARR churn and the best practices to reduce it using different CS (customer success) platforms. 

 

What is ARR Churn?

 

ARR refers to the annual recurring revenue a business makes for a business or a product. Mostly, the businesses offering annual subscriptions use this metric to calculate their revenue. Hence, ARR churn is the reduction in this revenue due to people who discontinued your services. It is significant to calculate this metric because:

 

• It helps determine whether a particular product or project has met your revenue expectations.

• How much revenue you have lost due to customer churn, and decide whether you need to work on it. 

• This metric helps determine subscription prices, offers, and other marketing strategies, as you will know what would work best for your business. 

 

Best Practices to reduce ARR churn

 

You would have to work to eliminate the churn to keep the annual revenue equivalent to the desired amount. If you can retain your customers and the new ones keep adding, your annual revenue will grow exponentially. Listed below are the best practices that can help reduce ARR churn. 

 

Proactive with Communication

 

If you are experiencing significant customer churn, it is crucial to know the reason. It is only possible if your communication with the customers is proactive. Provide a smooth and sorted mode of communication to your customers so they can share your concerns with you conveniently. Through this, you can learn about their reason behind discontinuing the services and can work to eliminate these factors. The best CS platforms you can use for customer communication are Gainsight, Totango, ZapScale, Planhat, and the list is never-ending.

 

Offer Incentives

 

To retain your customers, you can offer incentives. It is the best way to acknowledge the bond your loyal customers share with you. Moreover, it will attract more customers, motivating them to engage with your products or services for a long. You can offer incentives through a special birthday discount or start a referral program. The most promising CS platform that can help you in this is Genesys. There are other available options that you can explore.

 

Excellent Customer Services

 

When it comes to customer retention, you must recognize customer service. While calculating customer churn, you will experience that most buyers get distracted because they are not satisfied with customer support. So, train your customer support team to ensure they provide instant solutions to the customers, and you will see significant improvement in your churn rate. The CS platform you can use for this purpose is Freshdesk, Intercomm customer services. 

 

Customer Retention

 

Another effective way to reduce ARR churn is to do everything possible to retain your customers. Try to figure out how many customers have discontinued your services and learn about the reasons. Provide your customers with personalized services, listen to their requirements, and be ready to answer their queries, and there is no way you can lose any revenue due to churn. You can use Totango, Client Success, ZapScale to get insights about your churn rate and make business-related decisions accordingly. 

 

Seek Feedback

 

Your customers wish to be heard. So, it is an effective way to keep them glued to your business. It is significant to make changes to your products or services based on customer feedback to make them feel like an active part of the business. When your customer knows they can get what they want by simply giving the feedback, they will not switch to another brand. You can use CS platforms, like SurveyMonkey, for this purpose.

 

Apart from this, stay competitive, identify potential customers, and watch customer behavior closely. Keep upgrading your strategies based on the valuable insights, and revenue growth will follow! 

 

Conclusion

 

For any business, revenue and customer retention go hand in hand. It is crucial to track the churn rate to ensure the annual business revenue meets the desired targets and gives expected growth. You can use the CS platforms and practices listed above to get insights about your yearly revenue and how it’s getting affected due to customer churn. Keep making consistent efforts and experience exponential growth in your business.

 

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