It's a pay-to-play world. From social media to Google Ads, companies invest thousands of dollars in paid ads every month. However, there is one lurking metric you may not be tracking: your PPC churn rate.
When it comes to paid ads, most marketers and business owners track metrics like click-through rate (CTR), quality score, and cost per click (CPC). While these are important metrics, they only tell part of the story.
If your PPC conversion rates are high but your total sales are not, the problem may not be with your ad. Your customers may not stick with it.
What is the elusive PPC churn rate and, more importantly, why should you care?
What is the PPC churn rate?
Your PPC churn rate is the number of people who convert via paid ads but don't hang around. They can buy or subscribe to your product or service through a paid ad and then decide to end the relationship.
It's similar to a standard churn rate in that it tracks the number of customers who convert but then leave your business. However, your PPC churn rate is specifically related to the customers converting your paid ads from platforms like Google Ads.
Why you should care about your PPC churn rate
Most PPC metrics are how well your ads are getting customers to buy. For example, the CPC is how much you spend to get someone to click your ad. The conversion rates indicate how often users actually buy from your paid ads.
These critical metrics can help you determine if your ad and landing page match, whether your targeting is on the right track, or how well your copy is engaging your target audience.
There's also a lot that these metrics don't tell you.
For example, how well is your onboarding process working? Do your ads focus on the features that customers are most interested in? Are customers disappointed with your product or service?
Let's look at a (fictional) example to see why PPC churn rates matter. I'm looking for a grammar tool, so I'm typing "grammar help". The first ad is for grammar and is meant to help me fix mistakes and find the right words.
Let's say I decide to buy based on this ad. However, a few weeks later I found that the tool wasn't quite what I expected. Maybe it didn't work as well as I'd hoped, was too difficult to use, or I found a better solution. In the end, I'll cancel my subscription.
Does that mean the ad didn't work? No, the ad did what it was supposed to, but something along the way was not what I expected.
If Grammarly only tracks PPC conversion rate and not churn rate, they may not realize they are losing customers until it's too late.
Here are some things PPC churn rate can tell you:
- How well is your onboarding process working?
- whether customer expectations match your product or service
- whether your competitors offer a feature that you do not offer
- when your customer service is terrible
- if your documentation is confusing
If you don't pay attention to what and why customers are leaving, you may be wasting valuable ad spend on customers who don't stick with it.
How to calculate your PPC churn rate
To calculate your PPC churn rate, you need to calculate how many customers sign up for your PPC ads and how many customers you'll lose on paid ads by the end of the month.
The formula for calculating the churn rate is:
(Customers who left at the end of the month / Customers of PPC ads at the beginning of the month) x100
For example, if your company has 100 customers who converted from PPC ads at the beginning of the month and you're losing 25 of those customers, calculate your PPC churn rate as follows:
(25/100) x100 = 25% PPC churn rate
One of the biggest challenges in accurately tracking PPC churn rate is keeping track of customers who are converting through paid ads throughout their lifecycle so you can see when they are churning. If you don't have access to this data, you can use your total churn number, but it's not quite as accurate.
Whenever possible, use a customer relationship management (CRM) system or other tool to track customer lifetimes to determine where customers are from and when they are leaving.
Strategies for Lowering Your PPC Churn Rate
Now that you know how to calculate your churn rate and why it matters. However, what if you find there is a problem?
If you are disappointed with your churn rate results, there are several ways you can improve them. Let's look at a few.
Find out why your PPC churn rate isn't the same as snuff
The first step in managing a high rate of PPC churn is to determine why it's higher. This can be a challenge as there may not be a simple answer or you may have multiple problems!
First, consider things like:
- Is your software out of date?
- Has a competitor come up with a better solution or feature that you don't have?
- Are there any quality issues with your product?
- Do you have a customer service strategy?
- Do you provide documents?
- Is your onboarding process missing?
Run competitive analysis and UX testing to determine the cause. Customer reviews can also tell you where customers are having problems.
Of course, if you can find the source of your high churn rate, you can bring it down. However, what if the cause of the churn is not clear? Let's look at some other strategies.
7 Ways You Can Use Customer Loyalty To Reduce PPC Churn Rate
One of the best ways to reduce churn rate is to make sure your customers are happy. After all, satisfied customers are far less likely to leave.
Here are some ways to improve customer loyalty.
# 1: offer loyalty rewards
Rewarding long-term customers promotes the bond between your brand and your customers. Consider giving high-quality customers early access to new features, a dedicated line of customer support, or a free month to sign up for a new year.
# 2: Make customer service a priority
One of the main reasons customer churn is poor customer service. Don't let customers wade through awful documentation trying to figure out how to use your tool or service. Create an easy-to-use FAQ or video documentation and consider using a chatbot to provide timely service.
# 3: create a community
People like to feel part of something bigger than themselves. By creating a community, die-hard fans can interact with other customers, interact with customers, and create user-generated content that you can use for other marketing efforts. Use a platform like Facebook, Reddit, or Slack to create a place where your customers can get tips, make new friends, and interact with your team.
# 4: Reduce customer friction
Customer friction refers to anything that makes your customer's life difficult. For example, poor UX, lack of training for customer support teams, or documentation that is difficult to navigate. By making it easier to buy, navigate your website, and get information, it improves customer loyalty by ensuring that customers get what they need quickly.
# 5: Make it easy for yourself to get in touch to reduce PPC churn rate
Good customer service is critical to reducing your churn rate. Nothing makes customers cancel faster than struggling to get support when they have a question or problem.
First, respond quickly to messages and posts in paid ads. For example, Sipsey Wilder ran this paid ad on Facebook for her hip bags.
The ad has hundreds of comments and the brand has been careful to respond to customer questions and requests.
By responding, customers get the information they need and build trust.
Here are a few more tips:
- Include the email address or phone number of your customer service or sales team in your PPC ad.
- Make sure your contact information is clearly displayed on your website and key landing pages.
- Use a chatbot to provide answers to frequently asked questions.
When customers know they can contact you and rely on you to help, they are less likely to cancel your product or service when frustrated.
# 6: Create a smooth onboarding process to drive down PPC churn rates
Paid ads can persuade a customer to convert, but the onboarding process can affect or affect the customer's opinion of your brand.
Make sure your onboarding process is seamless. If people aren't sure how to use, or even set up, the service your company offers, then there is a problem. If customers don't understand how to use certain features, they may not get any value from your product or service.
Here are some ways to improve the onboarding process:
- Make the process easy: Label documents and make them easy to understand. Add action items as needed. For example, if users need to install code or sign a document, make this clear and provide documentation to guide them through the process.
- Ask which contact method you prefer: Some customers may prefer email, while others may prefer to use the phone. You can be in different time zones. Make sure you know when and how to contact them most efficiently.
- Offer training and tips: Make sure customers understand how to get the most from your offering by creating an automated email campaign that includes tips on how to use your tool or product.
- Gather only the information you need: Some information is important, such as: B. the language setting or the e-mail address of a customer. However, do you really need the physical address or company name? While this information can be beneficial to your sales or marketing team, consider whether it will benefit the customer or whether it will just annoy them with questions.
- Take your time: It might be tempting to explain right away how great your tool or service is. However, introducing too many features at once can be overwhelming for customers. Instead, use triggered pop-up boxes or distributed emails to explain features over time. Start by motivating customers so that they'll want to take care of all of these additional features later on.
You can also test your onboarding process every few months. There's a good chance what's working now won't be as successful in six months' time, or that certain types of customers may need more (or less) support during the onboarding process.
# 7: Provide a "Cancellation Poll" for those who cancel
If you've ever left a job, there's a good chance you've been asked to do an exit interview where the company asked why you're leaving the company and what they could do to improve themselves. These interviews enable companies to get honest feedback on topics such as work culture and management decisions.
Cancellation surveys serve the same purpose: knowing why customers are leaving can help improve other customers and prevent them from leaving.
When people cancel, include a survey with just a few questions. For example, if the user clicks Cancel, they may see a question box asking why the customer is leaving.
Make it easy by offering a multiple choice answer without too many choices so users don't get overwhelmed and click away. For example "too expensive", "went with a competitor" or "didn't need the service anymore". Create an "other" option with a reply box so customers can leave more detailed feedback if they want.
Tracking paid ads effectiveness starts with tracking metrics like CTR and Quality Score, but it shouldn't end there. Tracking your PPC churn rate will highlight issues that can generate long-term profits.
First, determine why your churn rate is high and keep in mind that various issues can contribute to customers leaving.
Next, focus on improving customer loyalty, making it easier for customers to reach you, and streamlining the onboarding process. Finally, ask customers why they are leaving. Perhaps the answer to your problems is a simple solution. and if not, our agency will help.
Are you struggling with high PPC churn rates? What strategies will you try first?
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