Customer churn. It’s on everybody’s mind.
Studies show that customer churn is costing U.S. businesses $136 billion a year. Even though you might not be aware of it, customer churn could be working its way through your business right this very second, just like a virus.
Luckily, there are ways to predict and prevent customer churn. It’s time for a visit to the doctor.
#1 Way to prevent churn: Provide (and prove) ROI
A common misconception among many Saas businesses is that customer churn is the result of customer unhappiness, but that’s not necessarily true. In fact, it’s entirely possible for customers to be unhappy with their experience but still stay with a service.
Why? Because of the ROI.
When it comes down to it, your customers are using your service because they want to see results. The greatest experience in the world won’t make a difference in customer retention if they’re not seeing results from your service.
In contrast, customers who experience great customer service but don’t see ROI almost always end up churning.
The worst part? Often, it’s completely unexpected. Customers who are happy with your customer experience won’t exhibit many of the warning signs that accompany churn.
Luckily, there are still ways to catch it before it happens. One of the biggest signs of unexpected churn is a period of inactivity after the initial sign-up. To combat this, it’s vital to constantly reinforce the ROI your customers are getting. Sharing the numbers with them will go a long way toward retention.
#2 Way to prevent churn: Talk to your customers
At the end of the day, preventing customer churn is about communicating with your customers. All of the fancy AI and data software in the world won’t replace getting your customers on the phone and having a good old one on one conversation.
This doesn’t mean that other methods of communication aren’t also effective at preventing churn, however. Communicating with your customers through email, chat messaging, webinars, and social media are all good ways to touch base with your customers and figure out whether customer churn is looming in the future.
#3 Way to prevent churn: Keep an eye on the competition
Maybe a customer was happy with you when they signed up, but some time has gone by and they now seem unsatisfied with your service. Often, this manifests in requests for new features or discounts.
Get ready for trouble—this could be a sign of churn on the horizon.
To stop this before it begins, keep a finger on the pulse of your industry. It’s important to keep an eye on any competitors within your market. Even if you were dominating the field a year ago, they could have developed new features or enhancements that now outperform your own.
A good way to prevent this is by creating a system that allows you to identify feature requests and communicate them to your Product team. By allowing your customers to have a voice in the product development process, you can stay on top of their needs and avoid losing them to the competition.
#4 Way to prevent churn: Identify product issues
Product issues are one of the biggest reasons for customer attrition. While a certain amount of support tickets are signs of customer health, since they’re interacting with your product, this only applies to an extent. If your customers are constantly running into issues, sooner or later, they’re going to take their business elsewhere.
To prevent this, you need to open up the lines of communication between your Support and Product teams.
On the customer experience side, your Support team needs to know how to spot the difference between a healthy amount of support tickets and an unhealthy amount. Once they hit that threshold, your Product team needs to be informed—after all, they can’t fix it if they don’t know there’s a problem. From here, they can use this information to identify and resolve recurring product issues.
#5 Way to prevent churn: Bring your zombies back to life
In the world of Saas, there’s no reason your inactive users have to stay that way. One of the great things about using the Gainsight PX platform is that you’re not limited to in-app interactions.
With other platforms, once a user goes dead, that’s it—they’re staying dead. With Gainsight PX, however, you have the ability to reach inactive users after they’ve left the app using an integrated email service provider. You can filter out your zombie segment, create personalized messages, and then schedule them on a recurring basis.
Not only does this let you communicate with inactive users and bring them back to your app, but it also provides you with useful analytics. Clicks, opens, delivery rates… these can all be used to create a better customer experience and prevent customer attrition before it starts.
Ultimately, predicting and preventing churn comes down to three things:
- Building a solid product that delivers customer ROI
- Creating a system that lets customers voice their feedback
- Acting on that feedback
While businesses will always experience some churn, following these steps will help set up a system that identifies warning signs of churn and hopefully, prevents them.