Churn Prevention

How to reduce customer churn, by enhancing your cancellation flow3 min read

Mar 8, 2022 2 min

How to reduce customer churn, by enhancing your cancellation flow3 min read

Reading Time: 2 minutes

In a recent survey of subscription businesses, eight out of every ten businesses had a team dedicated to enhancing their customer onboarding flow, whilst only 0.5% of businesses surveyed had any dedicated resource for their off-boarding experience.

The common model for new subscription businesses, startups in the SaaS field and high growth organisations is to give a hundred percent focus to gaining new customers, in order to generate a solid customer base. This is clearly a logical starting point for anyone trying to generate revenue and grow a business. However, it would seem that this is often at the cost of existing customers.

The downside to this ‘pure growth’ approach is that it does not create a stable customer base, as the lack of attention to existing customers then generates customer churn. And so begins a problematic cycle of needing to gain even more new customers to fill the ‘leaking bucket’ of customers who are unsubscribing.

Why you should pay attention to the peak-end rule

How a customer feels when they exit a service or product will often have a long term effect on their perception of that product or brand, which outweighs how they felt using it. This is referred to as the ‘peak-end rule’. In short the ‘peak-end rule’ is a psychological heuristic (a human strategy for decision making) which states ‘we judge an experience based on its most intense point (at its peak), rather than the entirety of an experience’.

So if an experience has a difficult ending with lots of friction and complications, customers will rate the whole experience as poor. This, of course, cuts the likelihood of customers returning or recommending.

Richer insights from cancellation flows

Getting to know your customers’ needs can enhance your product and create a business advantage. Gathering customer insight can often be a long and costly process of getting in front of potential and current customers, only to find that you have one half of the whole picture. Focussing your insights on subscribers who have no issues with your product doesn’t allow you to uncover reasons for customers leaving.

Gathering feedback from customers who are thinking of cancelling their subscription provides a uniquely rich insight into the reasons for your customer churn. Studies show that customers are up to x6 more likely to leave feedback in an exit process, than at any other point in their journey.

Learning to reduce customer churn

Not all customers who start cancelling their subscription are fully committed to leaving. Many customers can be saved before they cancel. This is a key moment for subscription businesses to tackle customer churn.

Here at Upzelo, we have seen that different types of customers will respond to different churn prevention tactics. The most effective tactic for saving cancelling customers is smarter targeting. This can be achieved by:

  1. Testing different offers with different audiences. This can quickly show you the most effective offers and messages.
  2. Creating different offers for the reasons customers give for cancelling.
  3. Building offers that go beyond simple money off e.g. pausing a subscription, switching to a different plan or booking a demo with your sales team.
  4. Using data from customer support tools (e.g. Zendesk, Intercom and Hubspot) to determine which customers should or shouldn’t be saved.

How Upzelo can help

We have built Upzelo around the belief that there is a smarter way to fight customer churn. By targeting retention action over analytics, you can focus on running your business, whilst Upzelo saves more of your customers.

Click here to learn more about Upzelo’s churn reduction features

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