Using Red Flag Indicators to Fight Churn

The most important thing to a customer success program in any company is that it keeps the figure representing this rate as low as possible. Of course, the CSM team can do all it can to prevent churn. However, that’s not where the real challenge lies. Once the churn has already crept in, as it inevitably will, how do you fight it? The real problem with this is figuring out why your customers are forsaking your service.

Once you know clearly why users are leaving your subscription base, you have half of the problem already solved. Now it just becomes a matter of plugging a few holes and keeping customers happy.

One way to efficiently track the causes of churn in your product is by using red flag metrics. This is mainly the process of tracking user behavior in a bid to find out where their behavior starts to change and become indicative of abandonment.

The Writing’s on the Wall

Before a user ever leaves your product and decides they won’t be logging into their account again, they show signs of the same. Most users won’t wake up one morning and suddenly decides to abandon a product. It is usually a slow process of frustration or indifference that culminates in abandonment. Your job as a member of the CSM team is to find patterns in user behavior to see these red flags before the user capitulates.

The signs are usually easy to see. The first thing to go out the window, of course, is engagement. What was a casual login every day turns into a login every other day. It soon becomes once a week, then once a month and before you know it, the user is missing in action.

Such signals are what we call red flags, and they are essential as they enable us to see the smoke before the fire begins to burn. Once you start to recognize at the red flags waving, you can quickly remedy the situation using various tools, including automation on a large scale or contacting the customer directly. You would be surprised at the difference made by a popup tooltip, or an automated email can make.

There Are Many Different Types of Red Flags

There isn’t a one-size fits all list of red flags that you can look for. Everything depends on the specifics of the situation; your product, the type of customer, as well a lot of other small details that come into play along the way.

The best way to find red flags is to work backward. Look at clear-cut examples of customers leaving your book of business. These are customers who you are sure to have entirely given up on your product. Try to find the common thread running through all of their cases. You can also look at other issues, such as:

  • Customers who haven’t opened your app in a long while
  • Customers who have given your product scathingly negative reviews
  • Customers who have recently uninstalled your app
  • Customers who closed their free trials

shutterstock_200797052The last one is particularly telling since a majority of customers don’t close their accounts, no matter the service. These are some of the things you can look at to give you a clear indication of who already left and who might only just now be toying with the idea of canceling your services.

To understand why customers are canceling your business, gather the data on a group of customers who have canceled and start to look for trends in their experiences.  It’s important to look for any patterns as they will help you quickly identify potential future churners and rush to fill the leaks before they become impossible to manage. Try to compare their activity, or lack of it, before they left, with the activity of your most devoted customers. This is when the data you collect as a business becomes vitally important. Refer to their history and compare it to other users, with tools like VisualCue, to understand the trends in unhappy customers.

Activation is a Critical Stage

As mentioned earlier, there aren’t any universal red flags to look out for. However, some common signs will easily apply to many SaaS products and organizations.

One of the factors that matter most is how many users manage to achieve activation. The activation point is the point where the user completes the setup process for their account. The truth is, most users do not reach full activation of SaaS products. The actual percentage is close to 60% of users on free trials. These users never log in to their products beyond that first login.

Users can fail to reach the activation point for a plethora of reasons. They might just have decided that they don’t like your product, or you might have targeted the wrong type of user with your marketing strategy. There will be some factors you can’t control, but it is essential to mitigate any factor that leads to churn as much as possible.

When the User Doesn’t Login Again

If your product has an established user base, then there is a clear pattern for most users for how frequently they log in, and it is up to you to understand that trend. The typical user might be daily, weekly, and so on. When you notice a user breaking from this pattern, then that’s a red flag of potential churn. The failure of a customer to log in is an indicator that the customer simply doesn’t see as much value in your product as they did before.

Here the solution is to remind them of how valuable your product can be for them. Send them an email containing reminders for them to check their accounts. You can also send them some educational materials or little tips on how to navigate particularly different areas that they might be having trouble navigating. It’s as simple as getting the customer excited about your product again.

The Follow-up Always Matters

Remember, the point of this whole process is to recognize churn before it materializes and nip it in the bud to reduce your overall churn rate. The easiest method to reduce churn before it starts is to observe patterns as they emerge and employ large-scale automated solutions. Tracking these signs of churn is made simpler with the use of the VisualCue data visualization tools. It can help you see patterns in your customer base at a glance and in real-time, allowing you to be able to understand better where your customers find value.

By looking for the red flags you and acting quickly on them, you can reduce your churn rate and turn business around altogether.

 

  • Sources
  • https://blog.intercom.com/designing-first-run-experiences-to-delight-users/
  • https://glideconsultingllc.com/makes-great-onboarding-process/
  • https://glideconsultingllc.com/10-reasons-saas-business-creating-poor-customer-experience/