Learn the best ways to collect meaningful insights on why users cancel their subscriptions from your SaaS tool.
Want to collect meaningful insights on why users cancel their subscriptions from your SaaS tool?
Customer churn rates are important metrics to calculate and track monthly because it costs more to acquire new customers than it does to retain existing customers. Hence, reducing churn rates could result in lower operational and customer acquisition costs.
But user cancellation can provide important ground-based data on why and how users churn in real time. Therefore, knowing how to measure and prevent cancellation is key to reducing your churn rate.
Today, we will be introducing how you can track your company’s customer cancellation and better retain customers with Churnkey.
Customer cancellations occur for various reasons. Cancellations indicate that something in your product or messaging is lacking and the customer no longer sees the value in your service.
Knowing why users cancel is especially important to the sustainability of your busines because a purposefully designed cancellation experience is the best opportunity for you to re-engage the customer, find out the issues surrounding customer dissatisfaction, and reduce churn.
When this percentage spikes, it means that something changed in how you are behaving across the board that maybe your consumers did not like.
This is often also referred to as “cohort analysis” where new customers in each month or period are tracked together as one cohort. This measurement determines whether new customers are getting a better new experience.
It is especially useful to determine why you might be having a higher cancellation rate in new customers than old ones. This helps you take steps to improve the situation and want to measure that progress.
This number is known to increase over time in a growing company simply because there are more customers available to cancel. Companies generally review this to look for trends.
This measurement is simply another way of measuring an “in/out” ratio. It refers to plotting the relative number of new customers arriving against the customers exiting and is known to diminish asymptomatically.
This largely applies for companies whose majority of users are not paid users. Hence, rather than a cancellation, they are more likely to be inactive. Thus, their lack of activity signifies an effective cancellation instead.
In companies where cancellation is identical to passive deactivation, a user might cancel but return because of certain reasons. In cases like these, you can decide to mark it as if the user didn’t cancel and update the historical data in your charts.
This measurement shows the total revenue you’ll get from a customer over its lifetime and can be computed with this formula:
Lifetime Value (LTV) per customer = Monthly Revenue * Number of months in the lifetime of your company’s existence.
Where CLTV means the total revenue you’ll get from a customer until they leave. Of course, the higher your total LTV will be, the better your bottom line normally is.
This happens when customers perform any of the pre-cancel activities that will be unique to your product. This may involve simply accessing the cancel screen or hovering over the cancel button.
Companies should develop a process where the moment customers show cancellation intent, they are marked as a churn threat. Thereafter, have the relevant personnel reach out to re-engage them. This process does not have to be manual and can be automated with Churnkey.
With Churnkey, you can analyze real-time session recordings to see how customers interact with your product and improve your flow. You can identify deals that convert and see reasons why customers stayed, leave, and who’s most at risk for you to focus your resources on.
Additionally, Churnkey helps companies understand why free trials cancel and use these insights to increase conversions. This is because Churnkey tracks why and notifies administrators when free trials lapse, so you can follow up by offering relevant offers, enticing customers to stay.
Create a concept map of the cancel experience and go through it from the customer’s point of view. This allows you to observe how the user experience is like and bring to light potential gaps in communicating with customers. This whole process is to figure out the pain points associated with your company’s cancel process.
These surveys consist of a series of questions you send to users who’ve cancelled to learn about why they cancelled and their overall experience with your product. They are valuable resources to help you learn why customers are churning and to steer the direction of your product. These can be disseminated via email, embedded on your cancellation page, etc.
The key is to ask the right actionable questions such as:
Churnkey has a built-in customizable cancellation survey that collects, collates, and presents you with why your customers are leaving. Our dashboards are conversational and easy to read. Also, you’ll be notified when we uncover cancellation trends. Once implemented, it is easy for you to gather free-form feedback for qualitative data without incurring additional administrative resources.
Generate an internal churn funnel within your company. This churn funnel begins at the point of cancellation with the goal of converting customers back to your business.
This systematic approach is split into 3 parts:
After segmenting your customers, personalize their cancel experience and attempt to satisfy unmet needs to increase conversion rates and influence customers to stay.
Churnkey builds a retention process for you by dynamically triggering personalized deals and interventions to stop users from cancelling. This is all based on variables like lifetime value, subscription tier, loyalty, etc from the historical data it collected within the platform.
This can be done through showing customers that you care. Rather than waiting to connect with your customers until they reach out to you, you can try a more proactive approach.
Communicate consistently with customers regarding all the perks you offer, show them you care about their experience, and they’ll be sure to stick around!
Churnkey is designed for optimizing customer offboarding flows. Simply embedding Churnkey’s offboarding flow allows you to immediately unlock a suite of experiences crafted to keep your customers around longer. This includes subscription pauses, coupons, live chat support prompts, and more.
Every company needs to build a cancellation flow to offboard customers which can be done in-house, but Churnkey will take that work off your plate. This allows you to use the time to build other more distinctive features to drive value for your customers!
Retaining customers is the best way to increase your growth ceiling! You can’t improve what you don’t measure. Learn more about why your customer churn and why customers are cancelling with Churnkey here.