Churn Remains a Problem, But Solutions Arise for SMB Service Providers

03/18/2016
Advertising service providers face a huge challenge when it comes to recruiting new SMB customers in a highly competitive market. But new customers represent only part of the revenue challenge. In truth, advertiser retention is a major issue for all who serve SMBs. The good news is that while this churn can not be prevented, it can, at the very least, be slowed.

A new report from the Local Search Association, “SMB Advertiser Churn: New Data For An Old Industry Problem,” indicates that churn rates are still above 50% or 60% for some marketing service providers. Unless there is a contract in place, these providers often lose their SMB advertisers within four months of the start of the engagement, according to the report.

So what can service providers do to prevent churn? According to the report, it comes down to “the right mix of products, pricing and service.” The data indicates that better sales training around digital, uncovering new efficiencies in the sales process, and offering a variety of DIY/DIWM/DIFM solutions are all pathways towards decreased churn.

At AffinityX, we feel that these kinds of improvements are crucial for both attracting new customers and retaining them. The sales person is the first line of communication with an SMB customer and that individual can serve as both teacher and ally throughout the process. It’s important for a sales force to stay up to date on the latest developments on digital, so that their SMB contacts can learn about what’s new and how it helps their business.

At the same time, this sets clear expectations for campaign outcomes, which increases the chances that an SMB advertiser will view their campaign as a success. That perception of success is crucial. Providers can offer lower cost “freemium” or DIY products, but success is what will entice these SMB customers to upgrade their products and spend more on advertising.

Sales is not merely a matter of finding the right customer, but of building a bond with that customer and helping their business improve through advertising. If service providers can set their sights on that goal, they’ll reduce their churn in no time.