Among the “certain” things in life:
Death. Taxes. Churn.
The latter of this group costs U.S. businesses an estimated $136 billion a year.
But what if, as customer success professionals, we could spot churn earlier and prevent more of it from occurring?
The key to mitigating customer churn is to forecast its approach. And the key to forecasting its approach is to monitor churn indicators. Here are a few to watch:
A Drop in Usage
If customers begin using your product less, it’s a telltale sign they’re getting less value.
Product usage can ebb and flow to an extent. But if there is a sudden, significant or unexplained drop in usage, it warrants swift, personalized outreach. It also means you should probably put that customer on your churn watchlist.
Support Ticket Activity
It’s a bit more nuanced to examine support tickets as they relate to churn likelihood. After all, an increase in support tickets could indicate increased product adoption, which is a very good thing.
Keep your eyes peeled and examine not just raw support ticket numbers, but also be aware of commonly cited issues and typical resolution timeframes. Minor issues that are quickly fixed don’t tend to be deal breakers. But, if customer service doesn’t match up with customer expectations, that’s where a potential downfall can begin.
The mention of customer expectations brings me to my next point—customer feedback! First, you need to give your customers the opportunity to share their feedback through a Voice-of-the-Customer (VoC) program. If you’re not quite there yet, then that is an excellent place to start …. ASAP.
Secondly, if you regularly collect customer feedback through a multichannel approach, and recent sentiment is lackluster or trending downward, then that is something for your CS team to act on immediately.
Customer feedback is critical, but be forewarned that it’s far from being the best or only churn indicator. Research has shown that if you have 26 unhappy customers, only one will be vocal about their displeasure, while the rest churn.
Is your account champion leaving the company? Maybe your main point of contact is getting a new boss, just as your annual renewal approaches?
Shake ups at your customer’s company can be totally benign. But, similar to the customer feedback category, it helps to examine personnel changes along with other telling metrics to make sure that you’re using all of the data at your disposal to forecast potential churn.
CSM’s Gut Feeling
Data can tell you a lot about your customers. But what about the CSM’s opinion? An account owner is paid to build a strong relationship with customers. So, if the CSM senses some bad signs—a more frustrated tone of voice, a passing negative remark, a mention of a big strategic shift—it’s critical to have a feedback mechanism for CSMs to use in order to throw up a red flag when needed.
A Pulse score is the simplest way to capture CSM sentiment and it can be easily compared with health scores, usage metrics, and VoC feedback for a holistic look at customer health and churn likelihood.
Tools to Manage Churn
If you are having trouble scaling your customer success processes, it might be time to explore software solutions. Customer success software gives you a 360-degree view of your customers, automates your workflows and provides more detailed insights so you can take action at the right time. Here are more details on how software like UserIQ can improve customer retention.