Churn has become one of the highest priorities for every SaaS. Every business needs to know what their monthly churn analytics data and the reasons for customers churning. They need to know when to focus on acquiring new customers and when to work on the existing customers.
A study found that the acquisition of new customers is generally 15 times more expensive than the retainment of current ones. (Winning New Business in Construction by Terry Gillen, 2005). This highlights how important it is to make sure that you look after the customers who you have already gotten onto your side.
But what do real-world businesses say about monthly churn? What lessons are being learned when businesses are analyzing churn data? We chatted to three different companies who have been monitoring and tracking their customer data to find if they have learned anything from their lost customers.
Monthly Churn Analytics Lesson #1: Data Speaks Louder Than Words
We spoke to a Chief Digital Officer of a SaaS which focuses primarily on HR solutions for organizations. His major takeaway from churn analytics is the knowledge that the data can provide you. For him, this focus lies in the numbers and stats.
Analyzing your churn is one of the most helpful ways of finding out the following:
- How many customers are canceling or unsubscribing from your services in a period?
- Are you losing the average amount of customers per month, or is it a bit higher/lower than industry standard?
- What are the main reasons for customers canceling your services?
- What do you need to do to decrease your churn rates and start keeping paying customers on?
Churn analytics helps you see if the rate of customers churn is increasing significantly. If it is, do you need to start putting an aggressive churn project in place? Are you needing to take some drastic measures to start saving clients?
Churn patterns hold deep amounts of information about your customers, their behavior and their future with your company. It is up to you to carefully go through the structured (web analytics) and unstructured data (emails and calls). You can then map out a project that could start retain your customers, and save you millions each year!
One of the more effective projects to start implementing is also helpful in gathering even more data. Adding more features, detours, buttons, signals, pop-ups and instant chats, allows customers to instantly let you know why they are not happy anymore. You can get a direct notification that something is wrong when they make use of these buttons. They are also helpful in letting the customer know that you actually do care and that they have options. Thirdly, you are getting usable data from this! You can understand what the main reason is that your customer is churning.
You can use all of this information to start implementing into your organization and meeting your customer’s needs.
Monthly Churn Analytics Lesson #2: Your Client is Reacting to Something!
The second interviewee was the Head of Marketing of an online sales tool. Not only is she responsible for marketing- related activities in the organization, but is heavily involved in customer success. She states that churn analytics is all about the customer. If you do not keep track of the data that your customers are unconsciously providing you with, you are ignoring huge possibilities.
Customers are fluid and can react to everything. Keep in mind various factors that could be impacting your customers;
- Competition; or
- Tech evolution itself.
She provided some examples of what customers could be reacting to when they decide to unsubscribe from your services. She asks these questions:
- Have you implemented something new in your site or included a new service? Online spaces are constantly evolving and trying to improve functionality, speed, the aesthetic of the site or just the products. Sometimes, however, these backfire. Customers can be very averse to change. If you have been through a makeover lately and customers are dropping off, you need to consider going back to what you previously had.
- Then again, maybe you are not changing enough. Technology is constantly changing and evolving and if you are not keeping up, your customer will find it somewhere else. You need to maintain your budget in research and development to continuously have your finger on the pulse of what is happening in your industry. You need to be able to offer your customers exactly what they are looking for without them knowing that they do.
- Are you too pricey? Times are actually getting tougher and tougher and most people have found themselves looking for the cheaper, or even free option to start cutting costs. You need to make sure you know what your competitors are charging at all times. Keep finding ways of offering discounts and special offers to keep those clients on board!
- Is it just that time of the year? Sometimes it is actually nothing that you have done wrong! In certain cases, it is just down to seasonality. You will be able to start picking this up after a full year of analytics, so don’t beat yourself up if you don’t pick it up at first. Once you have a solid 12 months of analytics under your belt, you can start looking at the bigger annual picture and seeing the customer flow over the year.
Monthly Churn Analytics Lesson #3: You Can’t Save Everyone!
In saying the above, however, she agreed that you simply will and even have to lose some customers! The saying is correct. You cannot please everyone and the customer is certainly not always right. (But we didn’t say that out loud). As any business, you will have to realize that there are some fish that you just have to let go.
Some customers will only subscribe to your site for the freebie that you are offering to get them there. Once the free trial expires, that person could possibly just move on to a similar product to take advantage and carry on until they have gotten what they need.
You will be able to pick this up if you are looking at your data correctly. Say, for example, their 14-day free trial is up and they have made the move to cancel. Your next step will be to offer them an extended free trial. They happily agree to this and carrying on with your service for another two weeks or so.
Once that is up, they once again start indicating that they will leave and you once again try to step in. If the customer churns, despite you offering several more options, you need to cut your losses and realize that you were not going to be making much money off of this customer anyway.
Monthly Churn Analytics Lesson #4: You Actually CAN Predict the Future
You don’t have to love data to learn something from your monthly churn analytics. But you will learn to love what the data can teach you. For the CEO of a small start-up SaaS, it is simply being able to know what his customers will do based solely on their current behavior.
His customer base is not big currently and he is working hard at making sure that they all remain customers before he starts looking at expanding. He is permanently going to extraordinary lengths to make sure that his customers stay loyal to his small brand. Spending money on existing customers is, for him a higher ROI than trying to search for new ones.
He has integrated various detours, pop-ups, instant chats, and CRM tools to be able to track and keep an eye on all customers. He watches carefully where they are bouncing, what they are clicking on the website using heatmaps and continuously engaging with them.
This naturally does get trickier once your business expands, but once you get the foundation right, you will be able to start tracking the data more effectively.
Predictive data modeling allows you to track customer behavior in order to understand when a customer is starting to display signs that they are about to churn. Your next step is to instantly take action and reach out to your customer to guide them right back onto the right path. With the right products, you can move from a data model to a project that successfully retains your customers.
The key lesson from all four is this: being able to engage with, track and monitor your customers becomes easier with the implementation of tools and systems on your site. Reaching out to your customer and finding out why they want to cancel is made simple with tools such as LessChurn. You will be able to start saving valuable customers today with a simple, and affordable integration.