Knowing how to fight customer churn is critical for keeping SaaS business models sustainable. The more customers you lose to churn, the more you have to invest in new customer acquisition to maintain your revenue, and the harder it becomes to grow your business. On the other hand, the more customers you can retain, the more revenue you gain from new customers you acquire, and the more your profit margins grow. This makes fighting customer churn one of the most efficient ways to increase your profits.
Here we’ll look at four proven strategies for reducing customer churn. They encompass how you manage your customer success team as well as how you interact with customers and incorporate customer data into your renewal process and product roadmap. Use these methods to fight customer churn and promote long-term retention and revenue growth.
1. Invest in Your Customer Success Team
The quality of your customers’ experience depends heavily on the quality of the service they receive from your customer success team. This, in turn, depends on how much you invest in training your team. When your team is up-to-date on the latest best practices and technology tools and prepared to handle frequent support issues, your customer success strategy will be more effective and your customers will enjoy greater satisfaction, resulting in higher retention.
You can use a number of methods to equip your success team. Creating standard operating procedures based on best practices establishes a foundation for effective training. Use your standard processes to create training procedures and tools for your staff. Assign mentors to staff members to assist with on-the-job training.
Follow up initial training with continuing education opportunities for successful team members. These can be delivered through formats such as seminars, workshops, certification programs and degree programs. Consider making paid continuing education a perk to help attract top talent.
Training of your customer success team can be facilitated through supporting technology that allows your team the ability to access standardized best practices and strategies for handling specific situations. Learning management systems provide online portals you can use to deliver training and track results.
2. Check-in Frequently with Your Current Customers
Customers who aren’t engaged with your product become more likely to churn. Taking steps to promote higher product usage increases the value customers receive from your product, making renewal more likely.
One way to promote customer engagement is by checking in periodically with your customers. The place to start communicating with customers is during the onboarding process. For example, sending automated emails to guide customers through their profile set-up sets the stage for future communication.
You can continue communicating with customers by sending notifications and tutorial links that promote feature adoption. For example, you can set up your CS platform so that if a customer’s usage patterns indicate that a particular feature would be helpful to them, it will trigger an email with a relevant tutorial.
Another way to check-in with customers is by sending periodic satisfaction surveys. For example, Net Promoter Score (NPS) surveys ask customers how likely they would be to promote you to a friend or colleague. You can schedule NPS survey requests to be automatically emailed to customers who reach designated benchmarks in their customer journey, such as completing onboarding or using your product for a specific length of time.
Another strategic time to check-in with customers is when their usage level drops below desired benchmarks. Use KPIs such as Customer Health Score to help you monitor customers for low usage and automatically reach out to clients who appear to have lapsed into inactivity.
3. Optimize Your Renewal Process
Churn decisions occur at renewal time, making your renewal strategy a key to churn reduction. Follow best practices to create an effective renewal strategy. For example, scheduling automated reminders to go out at designated intervals prior to renewal can reduce the risk of customers forgetting to renew. Monitoring customer satisfaction scores of customers who have renewal deadlines coming up can help you flag accounts that may need special attention.
To optimize your renewal strategy, it’s important to monitor your performance and make ongoing adjustments and improvements. Set up your customer success platform to monitor your renewal rate. Analyze your data to identify factors that may be lowering your renewal results, and make appropriate adjustments. For example, if your data indicates that customers who fail to complete onboarding have a higher risk of churn, this may be a sign you need to revisit your onboarding procedures.
4. Use Customer Escalation Data to Drive Your Product Roadmap
Your escalation data provides another valuable tool to help you fight customer churn. Patterns in escalation incidents point toward underlying issues which may represent barriers discouraging customer renewal. Removing these barriers can help you decrease churn.
Set up your CS platform to monitor escalation data so you can analyze it for correlations and patterns. Incorporate your results into your product roadmap to improve your current product and develop new products, solving frequent escalation issues.
Fight Customer Churn to Increase Retention and Promote Profitability
Taking steps to fight customer churn is one of the most efficient ways to increase retention, revenue and profitability. Fighting customer churn starts with investing in your customer success team through training and continuing education. Checking in frequently with your customers encourages engagement and promotes higher adoption, laying a foundation for renewal. Using customer data to optimize your renewal process makes it easier for customers to keep doing business with you. Reviewing customer escalations can help you improve your product development in ways that promote higher satisfaction and retention.
Totango’s customer success platform provides tools to help you automate strategies, such as checking in with customers, optimizing renewals and reviewing escalation data. Try it free to leverage automation in your efforts to fight customer churn.