Alleviating churn is crucial to the health of your business. Acquiring a new customer costs five times as much as the costs involved in retaining a repeat customer. We have an idea on how we can reduce churn using onboarding. But what about the customers who intend to leave us (or have already left) and move to a competing product? Is it possible to maintain a relationship with them? Do they hold insights that will help us improve and prevent others from leaving as well??

Churn is a normal process that happens with every organization. It’s inevitable that a few customers will leave you and start using another product just as your colleagues may move on from your team. However, knowing the reasons why is crucial for your organization. This understanding helps you to determine why they are leaving you, which helps you to bring in more improvements or changes required to retaining your other customers. However, not all customers will let you know that they are no longer using your product. It is sometimes difficult to gauge when exactly has your customer left!

To generalize, there are three different types of customers:
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  •         Active – the ones who are 100% engaged with and actively using your product
  •         Idle – who have been using your product but are not engaged so much now
  •         Churned – who have left you and moved on

In SaaS,  two types of customers generate revenue -. new business revenue (new customers added to the list) and current MRR (loyal customers continuing with our service). Churned customers who leave us result in less MRR. I A sudden dip can make you aware that churn is an issue. And you get a wake-up call!

Sometimes we know the reasons – we’re lucky enough to know why they’ve left. But sometimes, they don’t even let you know that they are gone. I always say ‘No news is not good news in business’.

I remember while having breakfast with London-based members of the Support Driven Slack group, with my friends from different organizations like Expensify, Olark, and Moz, someone  mentioned “one of my customers tweeted about a competitor’s news and it was only then that I realized, hey – he was our customer until last month.”

In SaaS, you can’t force your customers to stay with you forever. Often, there are situations where it’s difficult to keep a track of customers who have left you. But the percentage of such customers is 30-40% only. What about remaining 60-70%? Are we taking follow-ups with them? Are we trying to build a relationship with them?

Please don’t be surprised when I say  it is important to maintain a relation with your churned customers. Not to forget, they were using your product and working with you. It clearly implies that they know who you are, what you develop, and how you can help them. It could be just the matter of changes in their workflow or processes where your current product is not required.

Food for thought: in the future, there may be possibilities to offer a new proposal to your churned customers.

–        A chance to let them know how they can achieve their requirements using hidden functionalities or workarounds

–        A chance to bring their feedback on the table and take action with the help of the product team.

Overall, churn is a chance to raise the bar for everyone!

Even if this approach doesn’t work well today, you are still building a relationship with them – who knows what could be in store for the future!

There is also the possibility to come up with a fresh angle of the product for  your current customer who is leaving you now. If you know t and their requirements, you can easily pick up the phone and talk to them about new opportunities.

Every organization and the SaaS-based product should have a list of customers who intend to leave them. Although this list won’t contain 100% of churn-risk customers, it will still contain 50-60% of them, who can be approached before they cancel their license. Organizations need to ensure and find out:

  •         why are they leaving – what made them take this decision?
  •         is this being done in a haphazard way or was this planned before?
  •         is the reason revolve around a missing feature?
  •         were they in contact with Support to know more about it?
  •         did they contact their Account Manager before taking the decision?

There are so many concerns raised when you have more detail on this questions. These details help to improve your product and processes wherever applicable.

The best way to proceed with cancellation interview:

  •         Send an email to your churned customers

–        Be personal

–        Introduce yourself

–        Let them know why you are in touch with them

  •         Arrange a call and talk to them

–        Schedule the time according to customer’s convenience

–        Be handy with your questionnaire

–        Repeat the reason to let him know, why you are calling

  •      Prepare the report of your conversation

–        Figure out the reasons

–        Note down the entire feedback

–        Record all the pain points

–        Do ask what they like and dislike

  •        Share the report with the Product team as well as Support team

–        Write down every bit of call detail

–        Discuss and share it internally with the affected teams

–        Suggest the changes you want to bring in the process (wherever applicable)

–        Appreciate the feedback shared by the customer

  •         Share actions with the customer  

Gathering and utilizing customer feedback is a must for any business. 

But you need to make sure you have clearly defined why you are seeking feedback and how it will help you.

So here are a few questions to be asked during a churn interview:

  •         What made you start looking for an alternative?
  •         Is there anything you particularly liked or disliked?
  •         Do you plan on canceling the service altogether? Or do you plan on switching to another provider?
  •         How likely is it that you would recommend us to a friend or colleague?
  •         Which features did you like the most? Why?
  •         How would you rate the support received?
  •         Is there anything we could have done differently? What changes would you like to see in the product?
  •         Would you consider using us again in the future?
  •         What features could you not work without?

These questions help to understand why they are leaving and what can be done to bring him back. Also, you can discover if they would use your product if you were able to offer them the needed capabilities.

This is what we follow at Kayako,  is our story about how and why we maintain  relationships with churned customers, which has meant that we retain over 30% of churn-risk customers!

The processes mentioned above do not belong to a blog post, they belong to what we have done or are doing with our churned customers. No, I won’t count them as churned because I am sure, they will join us back! :)

We brought in and retained one-fourth of our Churned customers by following feedback process!