4 Leading Causes of Churn
One of the main objectives of any Customer Success team is to reduce churn, as much as possible. The lesser customers leave, the better. Therefore, it is important for any Customer Success representative to understand why their customers leave or turn to a competitor.
This infographic suggests four of the most common reasons customers churn.
1. Bad Onboarding: If achieving first value takes too long, customers will churn looking for immediate solutions
2. Lack of Ongoing Customer Success: Helping your customers achieve first value isn’t enough. You need to ensure your customers derive consistent value from your product.
3. Bad Customer experience: 9/10 customers have abandoned businesses because of a bad experience. So, treat your customers well, if you want them to be loyal.
4. Natural Causes: Not all customers churn because you made an error. Businesses may close down, decision makers can change, or customers could outgrow the service.
Even though CSMs have the responsibility of concentrating on customer churn or client churn, retention, and upsell/cross selling, a key portion of their job is to motivate their teams to positively interact with customers on a daily basis. Customer churn prediction can be extremely useful for customer retention. By predicting in advance, customers that are at risk of leaving are better placed to abstain them from doing so. Churn prediction is based on machine learning, which is a term for artificial intelligence techniques where “intelligence” is built by referring to examples. Churn management is the art of identifying valuable customers, who are likely to churn from a company and executing proactive steps to retain them.
Churn rate is an extremely important metric for SaaS or other subscription-based companies. Here, customers pay on a recurring basis. Customer churn rate is the percentage of your customers or subscribers who cancel or don’t renew their subscriptions during a given time period. In order to reduce customer churn be more proactive, communicate effectively and carry out actionable research. Besides, to reduce churn, most SaaS companies perform customer churn analysis. Customer churn analysis helps in identifying the reasons for churn and also to plan an effective strategy to retain customers.