How to Reduce Customer Churn in the Field Service Business?

Have you lost a customer? It happens with all businesses. 

Are you losing customers frequently? Are you losing more customers than new customer acquisitions? This is something to be serious about.

According to Forrester, it costs 5X more to acquire new customers than it does to keep an existing one.

Customer retention is the lifeblood of your field service business. Losing customers is indicative of poor field service efficiency and dissatisfied customers. 

According to research conducted by Gartner Inc., nearly half of all customers will cancel their contracts within the first 12 months of signing up for a new service plan. This is why it’s important to implement a robust FSM solution that offers features like dynamic scheduling and dispatch, real-time data collection, predictive analytics, and mobile access.

In this article, we list down a few tips to help you reduce customer churn in field service business.  

What is Customer Churn?

Customer churn is simply the condition when a customer stops buying your product/service. When customers stop booking your field services, they become inactive users. They don’t use your services anymore. They don’t interact with your preventive service reminder messages. They don’t re-engage with your marketing campaigns and eventually, they lose the touch with your business. This is called churn.

What is Customer Churn Rate?

Customer churn rate is an important metric for measuring how successful your field service company is at retaining customers. It helps field service providers understand whether their field service organization is losing customers or gaining new ones. A high churn rate indicates that there may be problems with your services.

If people aren’t using your field services, they aren’t interacting with your brand. They aren’t spreading word of mouth. So, how do you measure churn?

There are several ways. One way is to look at the number of active users over time. Another way is to track the lifetime value of each user. A third way is to calculate the average monthly revenue per user.

How to Calculate Customer Churn Rate and Revenue Churn Rate?

Churn rate calculations include both customer churn and revenue churn. A customer churn calculation includes the number of customers that left the organization minus the number of new customers added.

A revenue churn calculation includes the number lost due to churn plus the number of customers that no longer subscribe to your field services.

To calculate your customer attrition rate or customer churn in field service business simply take the difference between the numbers of customers at the beginning and end of a given period, divide it by the total number of customers at the start of the period, and multiply by 100 to arrive at a percentage.

To calculate revenue churn, you subtract all of the sales generated by former customers from the number of sales made during that time frame. This is done by taking the difference between the two dates.

If you want to know how much money your company lost because of churn, add up the amount of revenue lost from each former client. Then, multiply the sum by the average price per sale.

Ways to Reduce Customer Churn

Your field service business can scale up only when it serves enough loyal customers who pump money into your business and give your business the flexibility and scalability to grow. To ensure increased customer retention, you must be aware of the customer churn in your field service business and try to minimize it. Here are a few ways to help you minimize customer churn in field service business. 

1. Understand Why Customers Churn

It is important to track customer churn in field service business, especially if your goal is to improve customer retention.

A good place to start is to look at what problems your customers are experiencing. Is there something about your product or service that makes it difficult for them to use? Are they having trouble understanding your messaging? If so, you’ve got some work to do.

Then, take a step back and think about why they might be frustrated. Figure out what went wrong and try to correct it.

This is because there are many reasons why someone might decide to stop using your service. 

In a recent study conducted by HubSpot, we found that most companies struggle to identify the exact reasons why customers are leaving.

Some people simply move on to something else; others find a different solution altogether. In either case, knowing why customers are leaving will allow you to better address the problem.

2. Target the Right Audience for Your Field Service

It is essential to find the right target audience for your field service business. For instance, if you run a UPS battery maintenance service business, there is no use in advertising your service to someone who doesn’t have an inverter at his/her home or office.

To best identify your target audience look at the competitors, whom they are serving, how they reach out to the audience, etc. Focus on the people who will best benefit from your offerings. Once you know who you’re marketing to, start creating ads that speak directly to those individuals. 

3. Reach Out To Your Customers

When customers don’t book your field service even when the preventive service is due, your customers are likely to churn. This could be due to three reasons. 

i) Customer has forgotten about their service due date.

ii) Customer is swaying a competitor business for a better deal.

iii) Customer is uninterested in preventive maintenance 

For any of the aforementioned reasons that customers might be losing touch with your business, it is your duty to get them back to your field service company. 

Send automated service reminder messages to your customers before their preventive maintenance service due date. Send them a friendly reminder email highlighting the importance of regular preventive maintenance service for the longer lifespan of their devices. 

Personalize the service reminder messages with customized discounts and offers that entice the customers to quickly book a service appointment.

Offering incentives like discounts, exclusive deals, and customer loyalty programmes can help retain customers and encourage repeat purchases. 

Unoservice field service software comes with an integrated automated service reminder software for free that lets you send personalized messages to your customers. Further, it automatically fetches service due dates from the integrated CRM software and sends reminder texts before the due date. 

4. Engage With Your Customers

You can ask your customers directly about their experience with your service. You can ask them questions like “How often do you plan to service your device again?” or “How do you want us to improve our service?” These types of questions help you learn what makes customers happy and unhappy.

Customer feedback gives you necessary insights into how to improve your customer service and enhance customer experiences that meet customer expectations.

5. Analyze Churn Data

Churn is inevitable in every industry. But don’t let it happen to your customers. Using analytics to identify patterns and behaviours in your data will enable you to prevent churn from occurring. In fact, you can even use churn analysis to predict churn before it happens!

Analyzing churn includes looking at the following:

• Customer demographics

• Purchase history

• Loyalty program participation

• Service usage

• Product usage

6. Provide Excellent Customer Service

Customer retention is a key factor to reduce churn rates. Providing great customer service is crucial to reducing churn. If you don’t provide exceptional customer service, customers will go where they feel appreciated and valued.

Customers expect quick turnaround time and prompt services. Hence field service providers must digital solutions like field service management software that automates field service processes like scheduling, field service technician dispatching, live technician tracking and invoicing. 

Automation reduces errors and quickens your service operations, boosting first-time fix rates for your field service jobs. It does not leave any reason for your customer to switch to a competitor.  

We have listed down easy tips to improve customer retention in field service businesses that help you grow your customer base.

7. Under Promise; Over Deliver

Transparency is key to reducing customer turnover rates. In fact, according to research published by Harvard Business Review, one reason why people choose to switch brands is that they are disappointed with how a company handles issues. If you’re looking to reduce customer churn, it’s important to communicate clearly about your product and services.

Customers today have many options and they can easily find a better price somewhere else if they don’t like your prices. So, if you’re offering something unique, customers might just look around and find another option. They’ll likely feel betrayed if you don’t live up to your promises.

Companies should always keep their promises. When you say you’ll do something, you should do it. If you say you’ll complete a repair job within 24 hours, then you should fix the issue within 24 hours. 

8. Good Customer Service Must Be Available 24/7

Good customer service is omnichannel and it works 24/24. If you are able to deliver great customer care, whether it’s via chat, email, or phone, your brand will win over customers.

The importance of customer service cannot be underestimated. Customers want to know that there is someone listening to them. They want to feel heard and understood. They want to be treated like humans. And they want to be taken seriously.

Conclusion

The good news is that there’s no such thing as a “perfect” churn rate. In fact, most companies have a lower churn rate than they’d like. But knowing where you stand helps you identify areas where you could improve your retention efforts.

Customers of today prefer technological solutions applied to improve the quality of service. Hence it’s necessary for field service companies to adopt field service management solutions. 

Frequently Asked Questions about How to Reduce Customer Churn in Field Service Business