- 3 min read
4 Ways To Reduce Churn In Your WordPress Agency
SaaS companies have spent a lot of time and research reducing their churn rate. So, why not take those learnings to make our WordPress agencies better?
What is a Churn Rate?
Think of churn as in churning butter. You stir and stir and stir. This common farm-based term came into the Subscription Market to represent the number of customers lost over time.
You can also think of it as a revolving door of lost customers. Since SaaS companies work on a subscription model, understanding what causes churn directly impacts revenue.
“To prevent churn from happening in your company you need to analyze the behavioural, transactions, demographics and usage patterns of your churned customers.”SmartKarrot
How Can You Reduce the Churn Rate?
Without taking a peek into your systems, processes, invoicing, and communication style, it’s hard to say exactly how you reduce your web agency’s churn rate. That being said, if you do take a look at your internal data, we believe patterns will emerge.
Group those patterns and take action from well-researched SaaS experts. Here are three different lists of ways to reduce the SaaS Churn Rate.
SEO Industry Leader Neil Patel lists 7 ways to reduce churn.
- Make Customers “Sticky”
- Watch the 90-Day Onboarding Clock
- Charge Up Front
- Add a Negative Option
- Identify and Reduce Activity Churn
- Ask for Feedback
- Increase Average Customer Spend
SaaS Payment solutions provider, Paddle, offers 5 strategies to reduce the churn rate.
- Cancellation Surveys and Offers
- Dunning Campaigns
- User Activation Campaigns
- Upgrade to Annual Campaign
- Improve Subscription Payment Acceptance
Close, a sales automation tool offers these four areas to prioritize when reducing churn.
- Measuring Churn
- Accounting for Contract Length
- Factoring in Revenue Expansions, Upgrades, and Cross-Sells
- Considering Target Market
Though these three lists may seem overwhelming and, frankly, not applicable to your WordPress development agency, we’d like to focus on four ways you can reduce your customer turnover.
Does My Web Agency Have a Churn Rate?
If your web agency has repeat customers and/or sells care and maintenance plans, then you most certainly have a churn rate. Sitting down for an afternoon to consider your sales cycle, the average time it takes to build a website, and your monthly costs, is a good first step.
It is significantly more difficult to gain a new customer over retaining and reengaging a current one. Offering service plans, reaching out annually to check on website improvement needs, and asking for referrals are important customer retention tactics. Let’s look at reducing churn.
1. Reduce Churn by Clarifying Web Jargon
People don’t like to be confused. It’s possible that your clients just don’t know what to do next in your optimized system and process. They paid you the discovery fee and now they’re confused, don’t know how to log into Clickup and Slack, and feel like they have to do all of the work. Now, whether you call this churn or just a lost sale depends upon your record-keeping.
How can you tell? It could be that they just stop engaging with you. Customers in 2023 are likely to ghost their vendors and/or focus on higher-priority items. So, be sure to clarify the language you’re using. Think about simplifying the process even.
It’s fine to use industry terms, but be sure to define your terms. Not all customers know that a standard web build doesn’t include content or logo design, for example. So, what are they getting? What do they need to provide? What is a “high-resolution image?”
2. Reduce Churn by Charging a Downpayment Up Front
Consumers are more invested in things that they pay for in advance. Think of all of the free concerts you meant to attend. But that Beyoncé ticket that cost over a grand? You will definitely be there.
It is the same with your business clients. If you charge a 50% deposit for your $20,000 build, the customer is more likely to stay engaged, provide you with assets, and pay for their remaining builds. They’re also more likely to protect that investment with a maintenance plan. Think of your web builds like car sales. The more they pay, the more they will spend to protect their assets.
3. Reduce Churn by Instituting a Maintenance Plan
Maintenance Plans increase your Monthly Recurring Revenue (MRR). That’s one surefire way to get and keep a customer. The one-and-done website builds are your biggest enemy as a WordPress agency. Instead of choosing only large projects that stimulate you intellectually, work on getting some “pay the bills” clients who are easy, friendly, and who pay quickly. Restaurants, small shops, and other public-facing businesses like accounting firms and hairstylists need websites that are mobile-friendly, fast, and up-to-date.
4. Reduce Churn by Reselling Hosting
Reselling hosting (whitelabeling through Rocket.net for example) is another great way to increase your WordPress Agency’s MRR. Increasing a Customer’s Lifetime Value (CLV) effectively helps reduce churn from a revenue standpoint.
Hosting is a sticky business that creates sticky customers. Moving hosts (traditionally) is inconvenient, which helps you keep your revenue up, especially with maintenance plans.
A great WordPress agency is full-service. You can always white-label brand experts, writers, and backend developers. When the customer sees you as the expert they trust, they are less likely to leave.
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