Quick Tips

How to reduce cancellations and customer churning

No matter how great your product is, it is very likely that 40–60% of your free trial users never see the product a second time. — Samuel Hulick, Author of ‘The Elements of User Onboarding’

Whether or not you’ve found the product-market match, your company is faced with:

1. Visitors arriving at and leaving your site;

2. Users who sign up for the product without using it;

3. High paying customers churning-out to competitors

While these three scenarios are very different, they have one thing in common: they are perfect opportunities to learn how to develop your product and shore its dominance in the target market. We’ll concentrate on customer churning for this article, but learning from all three circumstances is vital to growing your company.

Why Consumers Churn?

There are various explanations why your subscribers/ customers cancel their subscriptions/ orders.

Possible reasons?

· Competition — They found another product which corresponds better to their needs;
· Substitution — They use only a fifth of the functionalities of your product;
· Quality — Your product is slow and flippant;
· Support — Your help can’t answer questions about them;
· External — Their company has cash flow problems and can’t afford the subscription anymore;
· Structural — Your customer or company client has quit the organization;
· Pricing — Your product got too expensive;
· Etc.

These conditions may have a varied impact, but one thing which is common is all of them lead to churning of customers. Sometimes the product is at fault, and there is also little that you could have done to avoid the cancellation.

But we have a solution to reduce your customers moving to competitors/ substitutes

Maction Consulting has worked on various customer exit surveys which helped clients to gain useful insights into how well their product is fulfilling customer’s expectations and requirements; they help you avoid potential cancellations. On average, clients have experienced a 15–35% reduction in order/ subscription cancellations.

How to Hire Customer Exit Enquiries

It is extremely difficult to hire participants from the Consumer Exit survey. Since they’ve already demonstrated disappointment with your product (they left!), many churners won’t want to engage with your team any further. Also, the responses would be biased since they have taken the step to leave; they may even be critical for positive aspects. For surveys, either early adopters or the angry-type would be the participants that you’ll get. Once responses are collected, they need to be modified a bit because you are not doing a survey on churned-out customers. It is something you can bear in mind when evaluating data from the survey.

If you are keen on collecting information from churned out customers — the best time to take your survey is as part of your downgrade flow or via email at the time of cancellation — when they’re still thinking about your product.

You can get the best answer rate by asking questions during the downgrade flow on the following churn interview:

Q. “What’s the biggest single reason led to the cancellation of your order/ subscription?

a) I don’t understand the way your product is used
b) Highly costly
c) I found a different product, I like that more
d) I don’t use enough of it
e) Your product doesn’t have the features I am looking for

If email is the best choice for you, you may want to contact the churners with a low-friction exit survey right after cancellation. Some organizations use gift cards (e.g. movie vouchers, Amazon gift cards) to incentivize their churners to maximize the number of responses they get, but this is also counterproductive and may contribute to prejudices in data collection.

How to interpret data concerning customer cancellation

When you know why your customers are leaving, it’s not hard to remember that it might have stopped any cancellations.

However, you have to segment responses using key criteria to better understand what the data means for your product. There are typical patterns to be identified, but without segmentation, they won’t be evident. These trends can help optimize your conversion, customer onboarding, pricing, product, loyalty, etc.

Here are some consumer exit questionnaires could which could be used during interview