Intro: Customer Churn and its Monsters
If you are responsible for customer success and/or retention in your subscription model company, you have monsters in your closet. These churn monsters take big bites out of your customer base. Even superior products and smart growth strategies can be killed by out of control churn monsters. Fortunately, you don’t need to be powerless in the face of this scary threat.
In this playbook, we will catalog the twelve common monsters that attack customer retention. For each churn monster, we will give a description of what its churn risk looks like, so you can easily identify it within your customer accounts. We will also give you actionable tips to help combat each churn monster, and insight into how ChurnZero can help.
What is Customer Churn?
Customer churn is when a recurring customer or subscriber stops doing business with your company.
Scarily True Customer Churn Stats
- It costs 6x more to acquire new customers than it does to keep current ones.
- Reducing customer churn by 5% can increase profits by 25-125%.
- The probability of selling to an existing customer is 60-70%. The probability of selling to a new prospect is 5-20%.
Customer that used to care about their progress but no longer does. As a result, they have stopped taking part in day-to-day activities.
- Set up automated alerts so you know when usage data is trending downward. Get involved before they become totally disengaged.
- Reach out ofering a helping hand to get them back on track. Set small and attainable goals at first to build their motivation and confidence back up.
- Highlight new product launches or features that they most likely don’t know about that could peak their interest.
Alerts help you proactively stay on top of changes to an account or contact by notifying you – inside ChurnZero, via email, or via text message – when important events occur.
Customer who once secured funds to purchase your products/services, but due to business changes their budget has since been cut, and they are being forced to reduce expenses and scale back resources.
- Revisit their primary pain points that led to them purchasing in the first place and highlight how your product or service has since solved those problems.
- Help the customer put together a comprehensive business case to justify the renewal to their supervisor and finance department.
- Put together pricing/package options for the customer that include discounts and/or downgrade options to get them through the financial strain with a lower price point.
The ChurnZero dashboard lets you breakdown total contract value by churn risk for all your accounts to get a better understanding of how the loss of an at-risk customer or a lower contract value will affect your book of business.
Customer who could receive value but is unwilling to put in the effort to either get started or continue using your product
- Uncover the true cause for the slacker behavior whether it’s lack of time, being overwhelmed or other underlying reasons.
- Address the customer about their lack of progress and explain how doing XYZ can actually make their job easier.
- Help them break overwhelming tasks into smaller parts to make them seem more approachable. Be sure to praise them for these small successes along the way.
ChurnZero usage data lets you easily identify your strongest and weakest accounts based on their usage. This data will allow you to confidently engage with those accounts based on this information.
Customer who is attempting to use your product to help them achieve a goal, however they are running into product issues.
- Listen carefully to what the customer has to say about the issue they are experiencing. Once you have listened, immediately empathize with their position to let them know you have heard their problem and are going to work with them to resolve the issue.
- Be sure to ask lots of follow-up questions to help identify the full scope of the problem so you can better troubleshoot.
- Don’t be afraid to escalate as needed. Work with the customer to come to a solution they are satisfied with. If this solution will require development time, be sure to provide the customer regular status updates until the fix has been deployed.
ChurnScores are customer health scores that give you a deeper understanding of your customers and their likelihood to not renew. The variables that you can use for the ChurnScores include event data, fields from your CRM or other sources like customer support tickets.
Customer who is feverishly busy and seems to have a frantic work pace which results in an overall degrade of progress.
- Try to determine the reason for the scatterbrained behavior. Is this a constant state for the customer or is it due to some current circumstances in their organization?
- Assure the customer that you are there to help them. Based on your knowledge of the account take the liberty of prioritizing the tasks that need to be done that will ultimately help lessen the workload in the long-run. Coach the customer towards these high-ranking goals and objectives.
- Continue to monitor the customer. Schedule weekly meetings to help keep them on task until hopefully they are able to slow down and/or multitask better.
Plays empower you to proactively engage with your contacts at the right times based on a variety of factors- everything from usage of your product (or lack thereof), to their point in the customer lifecycle, to their overall health as determined by their ChurnScore. Using Plays you can automatically target these contacts with relevant content and in-app messages that will help them get more value from your product and services.
Customer who needs support or guidance but for whatever reason has unfortunately been neglected and is left feeling helpless.
- Neglect usually happens slowly, and it creeps up on a customer relationship. Instead of focusing only on customers with fires, be sure to give attention to your other customers to help prevent them becoming an at-risk customer later down the road.
- If you notice it’s been awhile since you’ve connected with a particular client, take a look at their account and conduct an audit of their utilization. Schedule a meeting to go over this account review with the customer. Put together a success plan that includes needed support and guidance to help them meet their gaps.
- At the end of every meeting with a customer, be sure to get something on the calendar for your next engagement while that customer is top of mind, so it’s not accidently forgotten.
The ChurnZero Engagement section provides a review of the efforts and engagements you’ve done with your accounts, including in-app announcements you’ve posted, emails you’ve sent, tasks you’ve completed and activities you’ve logged. Leave no customer behind.
- Map out the ideal customer journey so you are able to monitor and track each accounts’ progress. Flag customers early on that seem to be falling behind so you can help keep them moving forward.
- Uncover the stalling point(s). Understanding the roadblocks that are holding up the process will be key in working with the customer to overcome them.
- Identify a champion on the customer side, who will be your liaison in helping to move their internal teams forward in the journey.
Journeys let you map out milestones and track the tasks and achievements that will drive the customer through each phase of the lifecycle in an organized and efficient manner. You can also set timelines for each milestone and for the journey overall, setting clear expectations for your processes internally and externally.
Customer who has ceased all communication and has stopped responding to your attempts to contact them.
- Refrain from declaring your past attempts to contact them. By drawing attention to the customer’s silence, you are only making them feel guilty, which isn’t going to spur action, but make them want to continue their avoidance behavior.
- Vary your contact attempts. Switch up the day of the week and the time of day. It’s possible you’ve been trying to get them on the phone during a time they have a standing meeting.
- Throw a Hail Mary. If it’s been way too long, send a handwritten note with a gift to their office. Most likely they’ll feel inclined to reach out to at least say thank you.
In-app communications and automated emails give you other alternatives for reaching your customers. Our usage trend analysis can also find users and accounts that are trending down in engagement. This will allow you to re-engage them before they ghost on you.
Customer who is actively being wooed by one of your competitors in attempts to steal their business.
- Be great (i.e. provide value). The best way to keep a client for life, and to fend of the competition, is to be the best option.
- Know your customer and their goals and challenges, and make sure they understand your unique value proposition. If you are seen as a trusted resource, it’s going to be hard to walk away from that.
- Conduct competitive intel, so when a customer reveals they are thinking of switching you know exactly how to stack up the reasons why that would be a poor decision.
NPS (Net Promoter Score) is a customer satisfaction benchmark that measures how likely your customers are to recommend you. If a customer falls into the passive or detractor segments, it’s a signal that they could be at risk of switching to a competitor, and that you should reach out to change the mindset before it’s too late.
Customer who is unable to receive value from your product or service due to a mismatch of current needs and offerings.
- First step is identifying a bad fit customer as early on in the process as possible. Don’t jump to conclusions but get a better understanding of who is a stretch fit customer and who is really a bad fit customer.
- Be as upfront and honest as you can with the customer, so expectations are understood and both parties can make informed decisions for next steps.
- Sometimes it’s necessary to count your losses and let these bad fit customers churn. It’s in everyone’s best interest as they can be a drag on growth, a waste of resources, and harmful to employee morale and industry word-of-mouth.
ChurnZero’s Account Segments are a powerful tool to let you easily group customers together that share attributes and/or behaviors (i.e. bad fit customers). Tagging your bad fit customers will allow you to adjust your engagement strategies to a low-touch model since their likelihood to churn is pretty much inevitable.
Customer whose company has been acquired making a lot of things uncertain about the future.
- As soon as you get wind of a merger or acquisition, proactively reach out to your day-to-day contacts for more information to assess the potential threats at hand. There will be a lot of unknowns, but request that they keep you in the loop. Be sure to offer your assistance in this transition period.
- Just as there are threats there’s potential for positives. Try to get an introduction to the new players on the team who might influence decisions, so you can position yourself for continued business.
- Find out who pays the bills now. Are there other business process changes like PO requests that you should now be aware of? Don’t let a wrong invoice address be the reason why you aren’t getting paid.
The Account Profile makes it easy to find everything about an account – from key details, to open tasks, to usage trends, to engagement with content – all in one place. This will be beneficial in understanding the current state of the customer going into this transition period. Also, automatically tagging key users within the new organization will be useful in identifying your allies early on.
Customer who used to be your champion or main point of contact within the organization but has since left their role at the company.
- Often times you won’t receive any advance notice about a champion leaving until after the exit has taken place. Instead of waiting for someone else from the organization to get around to alerting you, set up your own alerts that will ping you if usage ceases for a contact.
- Check on LinkedIn to verify if your contact has in fact left the company. If so, send a message congratulating them on their new role and ask who the best person would be to connect with in their absence. (Also, you never know they could now be your new champion at another organization.)
- Reach out to the next point of contact to schedule a customized training session to help educate, engage, and inspire the remaining users to become your next champion(s).
ChurnZero Events are actions and activities that your users do inside your product. The tracking of these events allows you to create contact segments, account segments, alerts and tags based of deep behavioral data. For example, if you see that a user has been deleted, possibly signaling a departure, you could then set up an automated alert to start your investigation. You can also use contact profiles to easily help identify new champions and allies, so you are not left vulnerable to just one.
Purpose Built for Customer Success.
Fight Churn Monsters with ChurnZero
Battle the Churn Monsters with ChurnZero, a real-time Customer Success platform. Here’s how we help:
From right inside your service and in real-time, know how your customers are engaged.
Customer Health Scores
Our big data engine means you have analytics to manage your customer base as well as anticipate success or failing health for individual customers.
Our powerful segmentation and targeting give you the ability to marshal your efforts towards the right customer sets and user personas.
Don't be stuck with only the phone or email for customer communications. Eliminate the friction in your customer communications by connecting with them when they are most engaged: when they are inside your app.
Automate tasks and communications based on customers' engagement metrics. Reps can use their newfound time to service the right customers and still make ALL their customers feel valued.
Map and Track Customer Journeys
Track your accounts progress in real-time as they move through customer journeys, such as on-boarding, expansion and advocacy.
Net Promoter Score
Our NPS surveys thru email and in-app provide one easy-to-obtain insight into customer health.