Predicting Churn

Reducing Churn is the primary goal of every customer success organization.  Having low churn rates will lead to a very healthy company which is able to be more and more profitable.  Customer Success is in a unique position to effect this because they know the clients best.  They are on the phone with them every day.    In order to reduce churn you need to know why customers do churn.  The hard part of that however is that it’s more of a rear view mirror.  You only know once they have canceled.  So its important to dig deeper and try to predict the churn.  Once you can do that, you then can try and get in front of it by having an action plan in place each time a leading indicator of potential churn is triggered.

The place to start is to quantify the reasons clients do churn.  Try to be as specific as possible.  For example, having a churn category titled “switched to different solution” is not very helpful because you don’t know why they did.  They could have switched because certain features were missing that they wanted, they were not a product fit in the first place or they wanted to spend less money.  So pick reasons that get at the root cause.

From there, look into triggers that could put a client on a path towards churn.  For example, if you know you lose a lot of clients when the leadership of a company changes or changes priorities, monitor the usage of those key stakeholders.  If you notice a key stakeholder has not logged in or deleted their account, that should trigger the Customer Success team to find out why and attempt to get in front if it if possible.

From there, you will want to analyze and edit.  Review how many potential churn triggers you tasked your Customer success team with and how many resulted in a retained client VS a churned client.  Look at the churned clients, did you actually trigger Customer success to reach out.  If not, why.

Your Churn reasons and triggers should be agile.  Changing them frequently is not advised but don’t hesitate to edit them as the nature of your product changes or the client profile you service changes.  Having an agile list that you review and track performance on is exactly what you should be doing.


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