How many nights this week has the thought of losing a customer kept you up?
No matter where you are in the value chain, losing business is harmful because it cuts revenue, can harm your potential for acquiring new customers and causes you to focus on replacing orders instead of increasing them.
Your churn rate, how often you lose customers, is a strong indicator of the health of your business. The higher it is, the more at risk you are. Even if you’re able to replace customers today, in the CPG industry we often need to maintain relationships because there are fewer channels available that can grow significantly over time.
While there’s no one-size-fits-all approach to reducing churn rate, there are some best practices you can use to have the right relationship on and off the shelf. Remember, always keep in mind what you’re selling and who you are selling it to for these tips, because that context matters and helps ensure your customers feel appreciated.
Here are our thoughts on keeping that churn rate low and increasing your company’s chances at future revenue expansion opportunities.
1. Start a Conversation
Do you communicate with your customers outside of re-orders or solving problems?
You’d be surprised how often the answer to that is “No.”
Communication, and specifically a lack of it, is one of the biggest reasons that customers leave a company partner, according to everything you’ve ever learned in business, and this Oracle study. Establish a relationship with your partners and reach out with updates or other information, plus any help you can provide.
Seeing a trend that they might not be aware of in your local market? Take a couple of minutes to shoot them an email with a screenshot of your heatmap or coverage gaps. They may or may not need it, but will appreciate the step.
A Top Option for You
One of the biggest values our customers have said they can provide retail accounts is store-level insights, specifically at the buyers/customers request. Think about your data and capabilities in this area.
For example, one of our customers said in a CVS buyer meeting that, after showing them real time data and shelf insights (photos, OOS info, compliance recap, and more), the CVS buyer admitted our customer had fantastic information and might even know as much (or more!) about the CVS stores than he did.
That buyer then asked if our customer would collect some additional information for him. With Shelvspace this was easy to do and now they offer this service frequently as a way to strengthen relationships with their retail buyers.
The information that’s important to you is also important to others. Look for ways to leverage is, and you might even identify a value-add to provide to partners.
2. Maintain Your Contact List and Preferences
Sometimes relationships sour, or the churn risk increases through no direct fault of your own. One of the biggest causes for this type of danger comes with employee turnover — either on your end or theirs. In the B2B game, you’re creating relationships between people as much as you are between brands.
When an employee leaves, continuity ends and loyalty can be undermined. You’re not always going to be able to retain your full team, and you can’t expect partners to do the same thing either.
So, plan for the eventuality. Start by creating detailed contact lists and profile of your partners:
- What do their stores need most?
- How do they like to be contacted?
- When do they like to be contacted?
- Are they generally open to new offers or products?
- Do they expect coupons, discounts, or other bonuses?
- Who do you contact if they’re unavailable?
Having a shared set of documents for your partners that cover these and anything else you think is important is your best guard against losing or damaging a relationship when employees on either side change companies or careers.
And, you can pair this information with heatmaps to better understand who is open to which opportunities in your area. Targeting these partners may help you improve relationships and revenue too.
3. Provide Hard Data to Demonstrate Your Value
One of the best ways to manage the cost of churn is to work to prevent it. In almost all cases, that means providing a tangible benefit to your partners and their sales numbers. However, even if you’re leading to sales and increased revenue, they may not always see it.
You need real, actionable data and insight delivered right to your partners. Data is one of the easiest ways to show your worth, and it’s especially important if you’ve just asked for better placement, more shelf space, or access to prominent displays. You’re working for those endcaps, and we can make it easy to show why you deserve them.
Data allows you to understand your business, and that makes it simpler to share your story with others. That’s why Shelvspace provides detailed analysis and retail reporting. Real-time insights give you a straightforward way to share the most accurate and up-to-date information on a partner or store level. You can consider sharing advanced information like a coverage map to show local partners where you have more demand than supply currently.
How much you share is up to you, but we always recommend using retail shelf management tools to boost trust and transparency around the data you share.
4. Bonus Tip: Highlight Your Customers
One final way to improve relationships is to appreciate the people on the other end. Celebrate the hard work they do, because it makes your sales work easier. In an open, honest way, you should take a moment to highlight their accomplishments and wins, while thanking them for being a part of your family.
We’ll be doing this ourselves in a much more vocal way starting next month, so please keep on the lookout for our first Stars on the Shelf coming next month!