There are two types of churn that SMBs need to contain: talent churn and customer churn. These are not just problems for SMB owners, HR managers, or customer service. Everyone in a small business has a role to play in reducing churn because this is critical to business survival.
On the bright side, IT leaders are uniquely qualified to be the hero and spend less time putting out fires at the same time. All they have to do is deploy new technological weapons to help the company retain both talent and customers.
In a study by Inc. Magazine and Oracle, problems with talent ranked No. 1 on the list of worries that keep SMB leaders up at night. 42% of them are concerned about hiring effective workers and 33% said that they are “very” or “extremely” worried about retaining the talent they find.
It’s no surprise why they feel that way based on the macroeconomic trends of rising competition and slimmer margins.
Oxford Economics found that 1/5th of SMBs report a higher employee turnover rate than their competitors.
The same study revealed that SMB employees are more likely to be dissatisfied with their jobs than those at larger firms and at any given time ½ are willing to accept a comparable position with similar pay at a different company.
Employee churn makes it harder to deal with customer churn. Venture capitalist David Skok calls the cost to acquire customer (CAC) a startup killer. He wrote:
“I observed that a very large number of these had solved the product/market fit problem, but still failed because they had not found a way to acquire customers at a low enough cost.”
That doesn't have to happen to your company. To hold onto what you have worked so hard to find, investigate these SMB technologies:
Research by LinkedIn Talent Solutions found that engaged employees are 59% less likely to change jobs.
Companies with formal onboarding retain 91% of their hires over the first year. Those without onboarding have only a 50% retention rate.
Many workers feel that there’s a big disconnect between the courtesy and respect they receive in the interview and the silence they encounter when they start work. Treat the first days of work as the first impression and use onboarding to set the tone for their upcoming career.
2. Conversation Support
60% of workers report that interactions with coworkers do the most to improve the work environment. While it takes time for new workers in an office to find their place, remote teams face an even greater challenge in joining the company culture.
Whether or not your SMB uses remote teams, the business phone system you put in place can do a great deal to facilitate engagement and help them talk through problems.
"Fancy action plans don't create engagement; ongoing two-way dialogue creates engagement," according to Kurt Deneen, at Gallup.
Spoke was built to make it easier for teams to connect with features like:
- Voice not VoIP so workers don't use up their data packages
- A staff directory that's always up to date by default
- A presence function that reports when workers are offline or on another cal
- Text/voice integration so the receiver can see call context and priority
Despite what you may have read in the media, workers don't hate phone calls. They hate being unprepared for phone calls. Spoke allows the sender to assign context and priority so team members are ready when then pick up the phone.
3. Mentoring Software
Nearly 75% of Fortune 500 companies have established mentoring programs to boost engagement, solidify retention, and drive internal information flows. A side bonus is the flowering of company culture. Mentoring helps new workers learn effective 2-way communication skills in the office and builds their confidence in presenting original ideas.
Perhaps the most important lesson a mentor can teach the next generation, greater than any specific career advice, is to choose their questions wisely and learn how to get the most out of a brief conversation. There are a host of new app-based SMB technologies that handle the admistrative end of setting up mentoring sessions and recording how valuable the meetings were for both parties.
4. Calculating Risks
An entire market has grown up around tech designed to help SMBs achieve “net negative churn.” Venture capitalist Tomasz Tunguz pointed out, “[If a company] loses 5% of its customer base each month, but the remaining 95% of the customers grow their spend with the startup by 10 percentage points, the total revenue from the cohort is equal to 105% of the revenue from the previous month. Like a savings account, each month, every cohort becomes more valuable.”
You may not be able to save every customer, but customer analysis reveals that you can reverse the effects of churn by devoting extra time to making stronger connections with your best customers -- those who are most likely to become brand advocates and recommend you across their private networks. Review and demo brand advocacy software that matches your growth strategy.
5. The Talking Cure
Perhaps the best way to reduce customer churn is a new twist on the world’s oldest customer service tactic: talk to your customers. Spoke can track who has called and let you know whether anyone in your company has returned that call yet. When prospects or customers don’t receive a call back, they simply move on to the competition.
Robert J. Moore, CEO of RJ Metrics, wrote, “Never stop talking to customers. As your company grows, it’s always tempting to spend less time on things that feel like low-leverage uses of your time. Don’t get caught in the trap of thinking this applies to customer interactions — it doesn’t! Customer conversations are implicitly strategic. They can provide you a deep, intrinsic knowledge of what the market wants, where you are strong, and where you need to focus. The best periods of growth at my company have coincided with me spending time with our customers, especially face-to-face, whenever possible.”
This is another area where Spoke can support your growth plans by recording every incoming call and keeping track of who, if anyone, has called the customer back. You'll never lose another customer to the black hole of voicemail.
IT's New Strategic Role
Instead of devoting their days to fixing tech emergencies, IT managers now have the power to play a far more significant role in the long-term health of their businesses. It all begins with bringing on the smartest SMB technologies to address the business owner's top concern: reducing costly churn.