Churn is what happens when customers leave. Involuntary churn is what happens when customers leave without intending to. Involuntary churn, also known as passive churn, accounts for up to 40% of customer attrition. That’s a huge chunk of customers that are leaving without even trying to.
Churn is bad, but the good news is that involuntary churn can be reduced or even eliminated by taking the right steps. Here are the most important steps to take right now to retain more of your hard-earned customers.
Make Customer Onboarding a Priority
Far too many SaaS are focused solely on customer acquisition. But what happens after you’ve won over your new customer? New customers still need nurturing.
Apathy and involuntary churn go hand-in-hand. A lot of customers passively churn because they weren’t using your product to begin with.
[tweetthis]Apathy and involuntary churn go hand-in-hand. A lot of customers passively churn because they weren’t using your product to begin with.[/tweetthis]
So, if a billing hiccup prevents access to your service, they probably haven’t even noticed. Ouch.
To prevent this scenario, focus on customer onboarding. They’re never going to be as excited about your product as they are at the point of sale. Build on that excitement by enrolling them in an onboarding email series. In this drip campaign, give them a tour of your product and show them how to use it. They may not understand your product yet, but by the end of your welcome email series, they should know the basics.
Survey Canceling Customers
Do an exit survey for every customer who actively churns, if possible. Your canceling customers will help you identify areas of improvement. By heeding their advice, you’ll reduce both active and passive types of churn.
Not every customer will complain. They’ll simply stop using your product. And once payment fails, they won’t restart it. This is why you need to lean on the customers who do complain. Sure, they may leave, but your churning customer’s insight will be valuable (and maybe a little hurtful, but try not to take it personally).
For example, if your churned customer complains to you that they don’t see the value of your service, that indicates a breakdown in communication. You can take the churned customer’s feedback to improve your service for your current and future customers.
Keep these two things in mind when conducting a customer exit survey:
- Keep your survey short. Ask no more than 10 questions.
- Mix your questions. Ask multiple-choice and open-ended questions for variety.
Show Them the Value of Your Product
As mentioned above, you may not be able to rescue canceling customers, but you can use their insight to prevent the rest of your customers from churning. Here’s how:
Show your current customers how to use your service to reach their business objectives. Share tutorials or how-to videos in-app or via email.
Show your current customers how they benefit in dollars and other data. For example, send quarterly emails where you share key metrics, like money or time saved.
Reiterate your product’s unique features in your emails, too. Show how you stack up to the competition (without directly naming names). Make sure that your customers understand why you’re the right choice.
Invest in Customer Success
Customer service is reactive, but customer success if proactive. Don’t wait for churn to occur before responding. Actively help your customers reach their business objectives.
As part of your customer success efforts, be sure to monitor your customers’ behavior within the app.
Here are a few customer behavioral metrics to consider:
- Average session length
- Last login time
- Screen flow
Then, offer your help to ensure that they get the most out of your service. Be quick to share tips and best practices. Also, offer case studies that show unique uses for your services.
Use Stunning to Reduce Involuntary Churn
If only there was a tool to help you stop involuntary churn and recover lost revenue. Oh, right, there is. Stunning is the only tool you’ll need to prevent both types of churn. Here’s what Stunning can do:
- Attempt to update billing information for expiring cards automatically
- Send pre-dunning emails before a credit card expires
- Intelligently retry failed payments at the right times
- Ask for backup payment methods to ensure seamless continuation of service
In addition to email notifications, Stunning also works within your app. Send failed payment or upcoming credit card expiration warning messages to your customers while they’re actively engaged on your app. Also, Stunning can send SMS text messages to your customers so that they’re notified quickly if a payment fails. We’ll link directly to their billing information page so that your customers won’t need to navigate through their account to find the payment update page.
Implement a Grace Period
Have you ever attempted to sign in to an app only to discover that you’ve been locked out?
It’s an embarrassing and confusing feeling that you should never give to your customers. Instead of immediately locking out users because of failed payments, offer a grace period.
Payments fail for many reasons, including payment gateway errors, bank-issued fraud flags, and exceeding the maximum card limit for that day. Don’t assume that the customer knows about the payment failure. Instead, give them a chance to correct their payment information before locking them out of their account. Add a giant (but dismissable) pop-up message in your app that will notify your customer of a problem with their payment.
Give your customer enough time to rectify their payment information, which is at least 3 days after a payment fails.
Create a Loyalty Program
Did you know that a loyalty program can reduce churn? Here’s how:
As we’ve already discussed, inactive or apathetic customers are particularly vulnerable to involuntary churn. They don’t feel connected to your service or your brand, which is why they’re able to easily drift away.
So, to keep them connected, build a loyalty program and automatically enroll all of your customers. Your loyalty program will make your customers feel special. Everyone wants to be part of an exclusive club. It will also give you the opportunity to develop a stronger bond with them.
Here are a few ways to make your loyalty program valuable to your customers:
- Give them more access to your service, not just freebies. For example, offer an exclusive preview of an upcoming feature.
- Gamify your loyalty program by awarding points for engagement, such as following you on Facebook or referring others.
- Offer valuable prizes for those points.
- Ensure that your prizes are realistically attainable by your customers (i.e. avoid replicating the unwinnable and frustrating Chuck E. Cheese model).
The goal with a loyalty program is to make your customers more involved with your SaaS. Customers who have an active relationship with you are less likely to churn.
Bottom line: Involuntary churn is bad news. Use the above tips to stop it from happening to you and your customers. If you haven’t already, click here to check out how Stunning can help you reduce involuntary churn.
Don’t miss these additional resources:
- Failed Payments? Do These 9 Things Immediately to Recover Payment
- The DTC’s Guide to Avoiding Failed Payments and Involuntary Churn
- Use These Tips to Increase Customer Satisfaction Without Spending a Fortune