Loyal and satisfied customers are not only less likely to churn— they’re also more likely to recommend your product to others and essentially act as brand ambassadors for your company. So what do you do about your cohorot of at-risk customers?
To truly understand which customers churn and to reduce that risk, then you need to study and target the right customers. Let’s discuss customers who don't value your product enough to stay subscribed, how you can identify them, why these customers might churn, and how you can retain those customers before they cancel.
Who are at-risk customers?
It's a customer currently subscribed to your product but is showing signs that suggests they may be considering cancellation. Identifying behavioral patterns of customers more prone to churn is the first step of reducing churn, and we'll get into that below.
How do you identify customers at risk of churning?
When you identify customers who seem to be on the brink of cancellation, it gives you the opportunity to act early and (ideally) keep them as customers. Let’s talk about a few different methods you can use to identify at-risk customers.
1. Use cohort analysis & tracking
Cohort analysis and tracking reveals invaluable data that can help you identify the patterns of at-risk customers and reduce your overall churn. As a SaaS business owner, we know it gathering, analyzing, and tracking cohort data can feel like a cumbersome task. But it really doesn’t need to be overly complex.
You can even use a platform like Churnkey to make this analysis as simple as possible. Churnkey can help reveal cancellation patterns, track how product releases affect churn, and uncover startling trends before they become systemic threats to your business.
2. Track customer sentiment and satisfaction
Sentiment analysis or frameworks like net promotor score (NPS) is an important metric when it comes to customer satisfaction. It’s used to assess customer loyalty, advocacy, and contentment toward your business, and it’s measured by asking existing customers how likely they are to recommend your product to a friend. Tracking your net promoter score gives you a sense of how satisfied your overall customer base is and can give you a head’s up if satisfaction levels are dropping.
3. Automatically reduce involuntary churn
Involuntary churn occurs when a customer’s account is cancelled without any action on the part of the customer. And it may be taking a bigger toll on your company’s bottom line than you realize. For most SaaS companies, involuntary churn can account for anywhere from 20-40% of overall churn.
Simply automating your involuntary churn problem can immediately increase your customer retention.
4. Identify inactive customers
One of the simplest ways to see overarching trends within your customer base is by using customer segmentation to group users by traits or behaviors. And a customer segment that you absolutely want to identify and track are users who aren’t regularly using your product. Because here’s the thing: if they’re not using it, they’re not going to keep paying for it.
If you can identify inactive customers through customer segmentation, you can then study those at-risk customers, engage them, and attempt to retain them as customers before they decide to cancel.
5. Leverage your customer support data
Whenever you receive a customer support ticket or any kind of communication from a customer with customer service, you’re getting data that can not only be used to identify customers at risk of churning but also provide insights into overall issues or gaps within your product.
Pay attention to that data and notice what trends, if any, you see. You can use that information to improve your product or the education about your product that you’re providing to your customers.
How can you help at-risk customers?
Once you’ve identified your dissatisfied customers who are at risk of churning, you have to figure out how to stop them from churning. And, in order to do that, you need to figure out what their pain points are and help them troubleshoot those issues in any way you can.
Let’s look at a few common pain points that could be problems for your at-risk customers and how you can address them.
More effective customer onboarding
The impact of an effective onboarding process cannot be overstated. The fact is, your customers need to be educated when they subscribe to your product. They need to understand how your software works and how they can make the most out of it. If they don’t know how to do that, then eventually they’re going to stop paying for it.
Now, you obviously can’t re-onboard an existing customer. But it’s never too late to start providing the education and tools that your customer needs to understand and fully utilize your product. If you find that your at-risk customers were inadequately onboarded, take the opportunity now to introduce them to educational materials and tools that can help them fully embrace your product for the first time.
Emphasize and improve product value
Your goal with your SaaS product is always to provide value to your customers. That value proposition is likely what drew customers in from the get-go. But it’s possible, over time, that customers may lose sight of that value or forget what brought them to your product in the first place. If you find that to be the case with your at-risk customers, take the opportunity to remind them what makes your product stand out, what makes it special and valuable.
Use customer feedback for product improvements
Some at-risk customers may be experiencing pain points that they want to tell you about but aren’t entirely sure how. That’s why customer feedback loops are so important. Try to maintain strong communication with all of your existing customers, but especially if they’re exhibiting at-risk behaviors, and provide them with clear, easy options for reaching out to you. Soliciting regular feedback from customers can help you recognize consistent issues and stop churn before it starts.
How can you minimize the amount of at-risk customers?
In order to be truly proactive at preventing churn, you want to do more than identify your at-risk customer and keep them as customers — you also want to stop customers from ever becoming at-risk. Let’s talk about strategies you can use to prevent future customers from becoming at risk of churning.
Improve your customer onboarding process
Earlier, we talked about how the onboarding process is a common pain point for at-risk customers. If you are seeing a trend in your current at-risk customers suggesting that they don’t seem to understand how to use your product, then it’s time for you to reassess your onboarding process moving forward.
You don’t want brand-new customers to eventually end up in the same spot as your current at-risk customers. If you can figure out how you to improve your onboarding process to set your customers up for success, you minimize the chance that they’ll end up confused and at risk of churning. Try to provide all new customers with solid first steps that they can use to hit the ground running with your product.
Improve and design products using customer feedback
If you’re receiving feedback from at-risk customers that reveals there’s a common problem they all have with your product, then you’re basically guaranteed that future customers will have the same problem. That’s why it’s important to take the customer feedback you receive and use it to improve your current product and even design future ones.
Set up campaigns that are triggered by certain behaviors
To prevent customers from eventually becoming at risk, early outreach is key. And that’s why it’s so effective to set up email campaigns that target customers who are exhibiting certain behaviors that could be predictive of future risk.
For instance, you could set up a campaign that sends automatically if a customer hasn’t logged into your product for a certain period of time. You can use that campaign to reach out to the customer, offer them resources and educational materials about your product, and provide them with a way to get in touch with you about any questions or issues they may be having.
Reduce at-risk customers and overall churn with Churnkey
With Churnkey, you don’t have to worry about manually tracking and following up with every at-risk customer. Instead, you can identify and stop churn in its tracks before it occurs. Sign up for a free trial and see how firsthand Churnkey is helping SaaS businesses reduce churn and retain more users.
At-Risk Customers FAQ
Who are at-risk customers?
An at-risk customer is a customer who is exhibiting signs or behaviors that indicate they may be at risk of cancelling their subscription.
How can you help customers at risk of churning?
The method for helping an at-risk customer and hopefully retaining them as a customer will depend on the reason they’re at risk. You may need to provide more education or training resources/tools, re-demonstrate your product’s value, or spend more time communicating with the customer.
How can you increase customer loyalty?
Make sure that you’re providing customers with easy access to resources and ongoing education throughout their customer lifecycle, as well as offering consistent customer support and soliciting regular feedback.