Any business leader today will acknowledge the importance of managing customer churn. The difficulty is that there can be hundreds of reasons why your customers are leaving you. Some might be in your direct control, others not.
Yet, as we explore the path of how we manage it, we often see common issues that work against your ability to reduce it. The following checklist is designed to help you understand the fundamentals of building an effective churn reduction strategy. This may not solve all your customer retention challenges but it’s a great place to start.
- Define churn: Before you embark on your churn reduction strategy, you need to first ensure you understand the definition of what customer churn is as it relates to your business. We know that it’s essentially the number of customers you’re losing over a period of time, but in some businesses, the natural re-order/subscription timeframes can be quite long and may skew your internal view. Define a core set of churn metrics and then ensure all business units that impact customer health are fully on board and using the same definitions that you are.
- Measure churn: Deploy operational processes to ensure you have accurate, regular retention and churn metrics that are easily accessed by the key stakeholders in your organization. Everyone involved should know how the company is doing with customer success and what the top influencers of churn are. Ensure that it’s reported and discussed at team meetings to keep it top-of-mind. Provide all departments with specific KPI’s that they’ll be measured against in your collective efforts to reduce churn.
- Customer success mapping: Map out what customer success looks like for your business and the functions that play a significant role in customer health, whether it’s Sales, Customer Service, Product Management or Pricing. The process of understanding every customer touch point will often reveal inherent weaknesses in the customer experience you’re delivering. Having clear line of sight on the critical interactions impacting customer health will help you proactively iron out any issues before the relationship is damaged beyond repair.
- Total company commitment: Managing customer churn is not the sole responsibility of one group, it doesn’t ‘sit’ exclusively with your Customer Success team, your Sales team or your Product team. Making this happen can be challenging especially in Enterprise organizations with complex, matrixed structures and competing priorities. If you’re a senior leader prioritize churn management and customer health as a core business objective – or get the buy-in from the key folks in your organization who can provide that support.
Keeping customer happy is no easy task but it can be made easier – through insights on which customers are likely to jump ship and the influencers that push them towards that unfortunate decision point. With these fundamentals in place, you’re ready to tackle customer churn with clear, transparent metrics supported an effective business process.
Steve Emanouel is Managing Director at Spyglaz and is based in the Melbourne, Australia office. He is passionate about bringing change management to organizations that are prioritizing the reduction of customer churn as a key objective.
Spyglaz delivers churn management software. We use machine learning algorithms to identify which customers you’re likely to lose before you actually lose them. Our proprietary algorithms analyze your historical customer data and identify trends that have historically led to customer loss.