Are you worried about Subscription Cancellations? Build an Effective Churn Funnel to Prevent it.

Churn is the main issue that can be a nightmare for any business. And why shouldn't it be? After all, who loves to see their customers go?

No matter the size of a company, customers not choosing to continue using your service for what so ever reasons not only brings down the energy of the revenue engine but also impacts the reputation of the business.

What to do when traditional methods fail?

When retention strategies fail to retain customers, companies try to implement one-off strategies or not-so-thoughtful practices, which don't get any significant results and do not stop the customers from leaving.

If the conventional practices fail to bear any fruitful results, then come high time to change the direction of implementing the strategy, which is the best practice to curb subscription cancellations, reduce customer churn, and retain them.

With the changing needs and requirements of customers, it has become crucial for businesses to reimagine the ways to meet their desires. This means that even if the customer is at the point of canceling the subscription or has even canceled it, a systematic and modernized approach should be taken into account to retain the customers.

In this article, we will look into account that how the churn funnel can help SaaS and subscription businesses to witness substantial growth in the longer run.
Let us start with understanding how the churn funnel can revolutionize the retention strategy of businesses.

How to build a churn funnel?

Although in the traditional ways of building a churn funnel, a systematic approach to analyze and track customer behavior is done, which identifies the reasons why they may stop using a product or service. Here are the steps to create a modernized intellectual way of building a churn funnel:

1: Skip the older methods and build a funnel -

A great tool used by businesses earlier was an exit survey which proved to be beneficial for the companies to some extent. It is a great method to listen to the cause of leaving from the customer itself rather than evaluating and postulating itself. Instead of getting detail from the sales team or success evaluation teams, it is great to hear the exact reason from the source.

But the question arises of what is being done with the data and how it is helping in reducing customer churn. The issue remains there, which becomes a challenge for companies.

Instead of doing this survey, it becomes mandatory to make a churn funnel, which holds the point of cancellation at the top but has the goal of reducing customer churn at the same time.

The churn funnel is divided into three different stages, and the process that needs to be followed is as follows -

  1. Accounts to be at risk.
  2. Efforts need to be made to engage those customers at the right time.
  3. Maintain the revenue for the business by making churning customers content with your services.

2: Fragment the churning customers according to their experience -

Next step to stop customers from moving down in the churn funnel towards canceling their subscription is to attempt to satisfy them by meeting their needs by making a specific set of offers that rectify the reason for their cancellation. This personalization can help businesses to stop customer churn while giving a sense of special treatment to the customers that can influence them to stay.

The personalized efforts should take into account every aspect related to the customer, like - the account's age, use, billing conditions, and plan type are all included in this.

3: Understand the reason for Customer churn -

The next step in the churn funnel is to understand the reason behind the customers deciding to take a leave. The practice provides insights into why customers are canceling their subscriptions. By understanding the reasons for cancellations, businesses can take proactive steps to address those issues and reduce the rate of cancellations. This helps track and identify the potential factors and steps to reduce customer churn.

4: Evolve the best-tailored efforts that make them stay -

Once you have identified the pitfalls in the customer journey with the churn funnel, determine the metrics you will use to measure the success of reducing customer churn.

These offers should be the solution to not only retain the customers but also retain the income which otherwise would have been lost due to customer churn.

After identifying Who and Why in the churn funnel, the next step is to construct a call of an action plan which ensembles the offers which can satisfy your customers' needs and dissolves their dissatisfaction.

5: Automate the retention workflow -

Any business needs retention since it ensures that clients will continue to support your brand. You may improve your operations and guarantee that your clients remain engaged by automating your retention workflow.

An integrated tool can be appointed here to combat the customer churn, which automates the alerts and maintains the retention workflow by emails, sales/success team, products, etc.

6: Maximize the incremental revenue -

After categorizing the churning customers, and offers for offering those customer segments, it is crucial to measure the retention account.

This can help you give a detail of what is working best for you and your customers.

Final words

In summary, building a churn funnel requires a comprehensive approach to analyzing and tracking customer behavior to identify pain points in the custome journey. By taking action to improve the customer experience at each stage, businesses can reduce churn and improve customer retention, leading to a more sustainable and profitable business model.