In the subscription economy, quickly mitigating and minimizing churn is a critical driver of business success. It's debatable whether or not a 0% churn rate is possible, however, companies can lower their churn rate down to a nearly optimal level.
If you've boarded the Customer Success train, you probably already know why reducing churn is so important. In short, it's cheaper to retain and grow your existing customers than it is to acquire new ones. Retention is the best way to achieve business success, which is why churn sends so many businesses to the startup graveyard every year.
So, you think you might have a churn problem? Here's how to get started fixing it.
Acquire The Right Customers
This is huge, understanding your audience is crucial when it comes to churn mitigation. Bad-fit customers are meant to churn, but before they do, they’ll consume your Customer Success team’s time and resources. To make sure you are getting the right customers you should:
- Align your pre-sales teams (Marketing, Sales) with your Customer Success team to define the appropriate buyer persona.
- Highlight the leading benefits and features of your product on your website and throughout the sales process.
- Be transparent about pricing, hidden fees might be a deal-breaker for some customers.
Deliver The Best Onboarding Experience Ever
User-friendly onboarding is the first step to creating loyal, engaged customers. From the get-go, make sure your sign up process is easy, quick, and intuitive. You want to capture that first spark right away and keep it alive. Start delivering value from the first interaction: a welcome email should be that and so much more. The welcome email is a great way to get users excited while educating them. Poor onboarding is hard to fix, but as the leading cause of churn for SaaS businesses, you should take it seriously.
Set Goals With Your New Customers
People don’t buy your product, they buy the outcomes it will deliver, i.e. the solution to the problem they are trying to solve. What is your customer trying to achieve and how can you deliver that value to them within a given time frame? Sometimes, goals are too shy or too extravagant when customers are left to their own devices. Customer Success Managers can oversee goal-setting by:
- Implementing a strong hand-off process with Sales. Customer Success Managers should know what sealed the deal in the first place.
- Delivering customer interviews during onboarding.
- Using surveys to understand ideal customer personas.
- Conducting Executive Business Reviews (formerly called QBRs).
Minimize Time to First Value
A customer buys your product for the value it will deliver. It’s crucial that you deliver and demonstrate value as early as possible. There are many ways to deliver value in early stage onboarding, for instance:
- Tutorials, not on how to use a product, but on how to achieve desired outcomes with it.
- Videos and webinars to make sure they are already learning about different ways to use your product.
- On-screen tips are a powerful friendly nudge to encourage your users to go deeper into the product.
Gather Customer Intelligence
Don’t fly blind, surprises are no fun in business. Instead, gather as much in-depth information about what your customers are doing at each stage of their lifecycle. This allows you to address issues proactively before they become problems and before your customer even thinks about churning.
Understand Your Customers
Don’t just get to know your customers, understand them. What is their thought process? What’s their number 1 priority? How often do they engage with you? How healthy are they? What’s their favorite part of your product? What’s their main pain points? If you think you know the answer to all of these, great. Now take it a step further and find out why.
Tier Your User Base
All customers are not created equal. Having different tiers of customers and designing high-touch and low-touch, scalable Customer Success processes is your best bet to ensure business success. If you’re not already familiar with it, make sure to get comfy with the Pareto Principle: 20% of your customers deliver 80% of your revenue. Keep this in mind to ensure your customers get what they are paying for, and that your resources are well allocated and focused.
Nudge Customers Into Using Your Features
Customers bought your product, they truly want to be engaged. They want as much insight and guidance as you can give them. If there is anything you can do to help your user achieve a greater ROI, you should already be doing it. Make sure all of your customers get what they are paying for, or else be ready to wave them goodbye.
Contextual and personalized emails are a great way to create a strong, long-lasting relationship. Make sure your emails always deliver value, you should never just say “hi” - working with your Marketing team is a great way to prepare topical content for every situation. Variables that should trigger proactive and automated engagement are product usage trends and the consumption of key features.
Make Yourself Available
Your customers should know how to reach you. Of course, you can’t just answer their calls all day and spend hours looking at your inbox. An efficient ticketing service, online chat, chatbot, knowledge base, or online community can all be great ways to help customers feel closer to your business. The bottom line is that they should have an easy, personable, and quick way to get answers when they have a question.
Churn hurts the bottom line, it hurts employee morale, and it hurts company reputation. Making sure your customers are set up for success and on the right track from day 1 is your best bet for improved retention rates.
About the AuthorFollow on Linkedin More Content by Mathilde Augustin