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How to Diagnose and Respond to Merchant Churn

It can be tough to manage relationships with online merchants. While it's important to have good online exposure, you must ensure that your products are being treated according to your standards. Finding a balance in this process is no easy task - sometimes your relationships with merchants suffer because of it.

There are many reasons why partnerships with online sellers might change. Sometimes, merchants might leave because of poor customer service on your part. In other instances, online sellers leave due to price erosion problems caused by other merchants in your network.

To best diagnose and respond to merchant churn, you must employ a multi-faceted approach with traditional customer service and an effective MAP policy. By monitoring online activity while also nurturing relationships, you can build a stable ecommerce ecosystem for your brand.

What is Merchant Churn?

Merchant churn is a term used to describe customer retention rates between brands and eCommerce partners. In turn, according to Investopedia, “churn rate, also known as the rate of attrition or customer churn, is the rate at which customers stop doing business with an entity.” Most companies develop churn rates during specific periods of time - such as each quarterly.

Churn rates can uncover some very useful data for improving the profitability of your business. For example, churn rates illuminate just how much poor customer retention rates impact your bottom line. Merchant churn is important in relating to your profitability, so businesses spend large amounts of money diagnosing and responding to the issue.

Diagnosing Merchant Churn

While merchant churn is relatively easy to track with metrics like churn rate, it is much more difficult to diagnose causes and develop solutions. This notion is even more explicit in the fast-based, globalized realm of ecommerce.

Poor Customer Service

One of the most common causes of merchant churn is poor customer service. Just like anywhere else in the business world, a failure to take proper care of your ecommerce partners can be detrimental to your profitability. Examples of where companies fall short on customer service include bad communication, outdated technology, and poor transparency in billing.

A customer service representative on the phone - How to Diagnose and Respond to Merchant Churn

MAP Compliance Issues

MAP compliance infractions from ecommerce partners can cause merchant churn. For example, if an online seller advertises the price of a product below that of your MAP policy, other sellers are forced to compete. When sellers realize they can’t make a profit at such low prices, they drop your products altogether.

Competitive pricing and price erosion can also occur due to the over-distribution of your products with known and unknown retailers. When too many online sellers have the same product, it can cause clutter and competition, which in turn, breeds heavy discounting.

If you are unable to control how your products are managed and sold online, it can have detrimental effects on merchant attrition.

Responding to Merchant Churn

Once you have diagnosed the cause of merchant churn, you can take proactive steps to rectify the issues. These changes might require a reassessment of customer service or the adoption of new technologies to enforce MAP policies.

Addressing Customer Service

Whether it be in the service industry or the field of ecommerce, good customer service goes a long way in ensuring client retention. Since you need online sellers to get your products to market, it's critical that you protect these relationships. Things to consider to improve customer service include:

  • Billing transparency
  • Technical support
  • Good communication
  • Conflict management
  • Updated technology

By ensuring that your online sellers are happy, you protect the overall profitability and sustainability of your brand.

Enforcing MAP Policy

A person signing an agreement - How to Diagnose and Respond to Merchant Churn

When it comes to enforcing map policy to reduce merchant churn, it's critical that you develop methods for gathering data online. By tracking the activities of online sellers, you can learn which merchants are helping your brand, while also uncovering which ones are causing damage. Finally, you can improve relationships with your strongest partners, while also cutting ties where it makes the most sense.

Using MAPP Trap to Regulate Merchant Churn

MAPP Trap has a robust ecosystem of tools that you can use to diagnose and respond to merchant churn with online sellers. With our software, you can:

By using MAPP Trap to track and enforce MAP compliance, you protect the most trusted sellers in your ecommerce network. By keeping careful tabs on the ecommerce activity of your brand, you ensure that price erosion doesn’t harm those retail partners that bring value to your company.

Try out MAPP Trap with a free Product Listing Report

of your brand's top products today.

Guides & Tips

MSRP vs. MAP: Which Is Better For Your Brand

Pricing Transparency: How MAP and MSRP Affect Customer Trust

5 Ways to Enforce Pricing Integrity with Strategies Beyond MAP Policies