Prevent customer churn

1. Actively reach out to current customers to collect their feedback. Ask what they do and don’t like, what’s going wrong, and how you could fix any issues.

Identify red flags you can act on before future customers cancel for the same reason. For example, Groove had a 4.5% churn rate. They reached out to customers to find out why, and pinpointed the most common reasons for customer churn. Retention rates increased by 71% after resolving those issues.

2. Design your onboarding processes to be quick and easy, while constantly communicating your service’s value.

If the value add to their life isn’t immediate, many users won’t stay on after initial free trials. Message users and remind them of your value at all times, especially during onboarding. The clearer your value is and the simpler the signup is, the easier it will be to convert the estimated 40–60% of users who sign up for a free trial without becoming paid users.

3. Offer tutorials, live chat, and a number to call, so customers have multiple communication channels to choose from, especially to those you identify as high-value.

Swift responses to customer service inquiries ensure loyalty and creates brand advocates. For example, Mention separated users into two groups: paid users and those on a free trial. Support tickets from paying members were prioritized first; marketing was increased toward those on a free trial. This helped them reduce churn by 22%.

4. Create an exit survey that asks lost customers why they're leaving. Using cohort analysis, separate users into groups based on their answer.

Over time, you’ll begin to notice which group gets larger, and is the biggest reason for churn. If you fix that issue, recoup lost customers by using the list to reach out and explain that the problem has been solved.

5. Identify your north star metric, one that demonstrates the most value you're giving to customers, and track it. Any negative performance should immediately raise an alert.

For example, Airbnb’s NSM is nights booked. Customers falling beneath that average means they’re at risk of churning.

6. Communicate frequently with users by anticipating and answering customer questions, before they have to ask.

Let people know about new developments: is there a new blog post? Have you improved some functions of the site? Are you offering new services? Send emails to customers who haven’t finished setting up, or haven’t visited in a while, and make them personal. Offer assistance. For example, Zendesk schedules regular check-ins with customers. They get ahead of problems before customers think about leaving.

7. Offer incentives like rewards, discounts, freebies, badges, and sweepstakes to engage users.

Carefully select the customers who most affect your overall profits, and what incentivizes them. The potential for a reward often retains users who might otherwise cancel their subscriptions.

8. Research your competitors, and regularly track their prices and features, to keep a competitive edge.

If you can’t beat them on price or features, explain why you’re better than competitors in other ways. For example, if a competitor is offering a similar tool at $20 less, explain your features that make the extra $20 worth staying for.

9. Measure customer happiness using metrics like Net Promoter Score (NPS). Reach out to low-scoring users and ask why they feel that way.

Periodically survey existing customers and ask them to rate how likely they are to recommend you on a scale of 1-10.

10. Continually offer exclusive content and rewards to show gratitude to your current customers, and remind them of their importance.