Imagine all the work Sales did to close the deal–and all the work you did in Customer Success to onboard that customer onto an amazing journey. And then they cancel their contract.

Infuriating, isn’t it?

(Sora Shimazaki / pexels)

The good news is there’s a solution. The bad news is it’s kind of complicated. Managing customer churn involves recognizing a myriad of factors that may be contributing to a customer's exodus at any point along their journey. Identifying one, two or several factors affecting churn is the first half of the solution to decreasing churn rates. Once you know what is causing the churn, you can develop a plan to reduce it.

Several tech tools can help you monitor and reduce your churn rate when it rises. Look for the following when researching the right churn management software solution for your business:

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Start with a churn post-mortem
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Churn post-mortems help you identify why a specific customer canceled their contract. Over a handful of customers, you’ll start to see both trends across customers, indicating business-wide challenges to fix, and issues specific to one (or a small number) of customers, indicating an ideal customer profile (ICP) challenge you need to address.

The steps are:

• Document the customer overview
• Document internal customer information
• Conduct an exit customer success call to collect qualitative information
• Look for trends across the data
• Identify solutions to problems that won’t cause more problems

For more how-to insight, check out Catalyst’s guide to quick, low-stress, impactful churn post-mortems.

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Addressing core issues
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Your churn post-mortems might indicate a variety of potential issues. Here’s what to watch out for.

1. Onboarding assistance

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Just like you, customers want to succeed as quickly as possible. If they feel the learning curve for your software is too steep, they could easily give up and move on to another product when their monthly subscription ends. Yet receiving too much information, too fast could lead to overwhelm, lack of action, limited value, and eventually churn.

Here are some tips to keep onboarding value-packed without becoming overwhelming:

• Deliver personalized how-tos and next steps delivered at the precise time they are needed (like at installation time or immediately after).
• Consider creating a beginner’s guide for installing and using your product to disseminate in some fashion (such as in a ‘Welcome’ email or in-app pop-ups).

As your business grows and you learn more from your customers, your onboarding process will likely evolve. The key is to give them something over nothing but not “Everything Everywhere All at Once.”

2. Involuntary churn reduction

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Amazingly, something as simple as failed payments resulting from expired cards can play a considerable role in churn rates. Having software that can identify this “involuntary churn” and then help you resolve the issue and prevent it can quickly boost profits and loyal customers.

Find a software solution that assists you with staying on top of payments. It should either automatically identify and communicate with customers needing to update their payment info, alert your team to personally connect with the client or a combination of the two.

3. Subscription metrics

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Collecting data for data’s sake is not always helpful. You only want to track the most relevant information. To make matters trickier, as you evolve, the data that’s most vital to focus on can change, too. Even a lead indicator like MRR (monthly recurring revenue) has so many different elements that it may need picking apart to be informative.

Software with subscription metrics can help CSMs hone in on the most meaningful indicators. Use existing customer data to calculate a range of preferable reporting metrics.

4. Messaging functions

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When it comes to creating loyal customers, communication is king. For example, a study by McKinsey and Company found that more than half of customers engage with three to five channels during each journey they take toward making a purchase or resolving a request. That means if you’re not available on multiple channels, you could be missing a customer’s cry for help.

Find a software that gives your customers access to live chat for immediate support. One with an automated support system can help increase customer success and decrease churn. Onboarding and education improvements benefit from features like this, too, as you can push along the proper guidance at the right time, such as when the customer is actively working within the app.

5. Feedback loops

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Customers can churn for any reason: a lackluster user experience, mismatched pricing to value, not feeling wowed by your offerings, etc. To reduce churn rates, you must learn why customers stopped using your product.

Churn management software can automatically reach out to previous customers with timely surveys so you can learn and grow from those who decided to shop elsewhere. The best software for the job will make sending and responding to surveys convenient.

Side note: This is also a sales technique. Since 90% of customers check out online reviews before buying, listening to customer feedback and talking about those changes publicly can bolster sales and outreach efforts.

6. Heatmaps

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The more you learn about your customers' use habits, the better. Pinpointing “slipping” customers is easier with software that allows you to see who they are and how they interact with your product. Look for churn reduction software that enables you to see what your customers are doing within your product–what they’re clicking on.

If you don’t have historical data to look through, you can also run tests with heatmaps:

• Ask both current users and non-customers if they would be willing to take part in a user experience research conversation with you.
• During that conversation, you can ask if they would be willing to try out the platform. Use that opportunity to instruct them to try certain tasks–then follow what they instinctively try to do.
• In the background, have heat map software working so you can collect and keep the data.

This type of test will help you get initial data about how customers think your platform should work. While not the same as collecting real customer data over time, it can provide insight into why some customers might be clicking in a specific location (or not). If you can address UX issues to ensure customers can do what they want with your platform, you go a long way to reducing churn.

Proactively managing churn

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Many different factors affect churn rates. The key is to figure out which one or few are affecting your organization so you can readjust your course and move in the right direction. Factors and solutions vary greatly. However, software that helps you effectively analyze, measure and resolve issues leading to churned customers will help you secure the recurring and upsell revenue you need to grow and improve your customers’ lifetime value.

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