What is churn management? In simple words, setting up a streamlined process internally to keep track of all your valued customers and ensuring that they are getting the right amount of attention and not feel left out.
Very few brands out there have a streamlined process setup. Some brands have tools and software to track certain attributes that point towards a trend that might lead to churn. It can be done with simple tools also. I use an excel sheet to track it. It all boils down to identifying the right attributes for churn management.
Proactive Steps: Below is a detailed analysis of how I proactively keep track of the important attributes.
The scale ranges between 1-10 and anything above a 7 is considered healthy. In the case of Gatekeepers, Feedback, Product Roadmap, Business Review & Survey Participation – all of these have binary values as it is either a Yes or No.
Having this information and comparing the charts of Adoption & Engagement should give you a decent enough idea of how each client is doing based on your predefined parameters. This would also enable you to understand where your attention is most required and take corrective steps to ensure that it doesn’t lead to churn.
Here are a few things explained in detail:
- Business Case – Not all requirements of the client are full-filled during the initial stages of implementation. So this score helps you understand that there is scope in the future to do something about it. The harder you work in achieving this for the client it ensures that they would stay longer with you.
- Value Realized – After a certain time has passed since they started using your product/service find out if they have truly realized the value that you have to offer?
- Business Review – Under this you have two types. The first one is operational business review and the second one is strategic business review. The operational part of it deals with your support issues and enhancement requests while the Strategic part of it deals with the goals you have set along with the client to be achieved in the next quarter.
You can add up all the values for each individual client and come up with a health score. This would help you arrive at a standard health score. Clients above that score would be healthy and ones below would need more attention. You should also know that there could be different attributes that contribute to your adoption and engagement score but I believe this representation encompasses most of it.
Most brands would hire people for different roles to perform activities that would lead to an improvement in adoption and engagement. This is to ensure or prevent clients from churning. Here are few of the standard roles:
- Adoption Manager – One who ensures that each client is properly engaging with the product/service that you consider healthy.
- Account Manager– One who takes care of up-sells, referrals & contract renewals.
- Support Manager – One who takes care of bugs and enhancements and ensures that all the support tickets raised by the client are tended to within a favourable timeline.
These people should meet frequently to understand what’s happening to each of the clients. This almost always delays the process of understanding each clients health. Some brands have understood that this delay could be a problem and built up a Customer Success team to handle all the three activities. Now the customer success team can maintain information in a structured way as shown above to give an overall understanding of the portfolio of clients. This saves time and ensures that clients are properly taken care of.
Now, even if all of these attributes are monitored properly there is a small chance of churn to occur. Some of the factors for that are listed below.
- Sudden drop in usage
- Change in leadership
- High volume of tickets raised
- Not using the support portal
- Financial problems
Any of the above-mentioned events can happen all of a sudden which might lead to immediate churn of a client. In 90% of cases, there is almost nothing you can do except make the transition as smooth as possible. For the remaining cases, you will have to develop a set of questions that you can ask to figure out if there is hope of retaining them. Here are some of them
- Questions about their overall experience.
- Questions around what could’ve been better.
- Questions about what was good.
- If there is something that we could do for you in the next quarter that would make you stay, what would that be?
- Any other feedback that you would like to give us.
Now based on the feedback from several clients you would see common patterns emerge. Build a strategy around minimizing these and it would really help in retaining a few of the customers in the near future. This is how you use insights from a reactive approach to develop a strategy for a proactive approach.
Points to remember:
- Cost of acquisition is always greater than the cost of retention.
- Always hire people who are proactive for client facing roles.
- Have a structured team in place to handle the portfolio of clients.
- Send the best people from your team to deal with customers who are a churn risk.
- If you maintain & monitor these attributes for each client, one for adoption and the other for engagement you will almost always know what is happening to them.
- Every brand has churn so don’t think that you are alone in this.
Here’s a simple metaphor. Your brand is a garden with a variety of fruits, vegetables, flowers etc. You have to ensure that it is properly taken care of and tended to every day they all need different levels of care and attention. If you lose focus for even a short period it leads to a bad yield and it only a matter of time before it spreads. Your job is to proactively ensure that it doesn’t lead to that and maintain a healthy mix.