4 Step Action Plan When Customer Churn Happens
Churn, also known as attrition, is definitely not on any Customer Success Managers’ (CSM’s) most desired ‘Top Ten’ lists. It’s a difficult, albeit optional, stage of a customer lifecycle for both the customer and the solution provider. Obviously the best way to deal with customer churn is to avoid it altogether by putting proactive steps in place, but attrition is never 100% avoidable.
Churn Can Be An Opportunity For Growth
There is, however, a lot to learn from customer attrition. While it can be hard to handle regardless of how often or how little it occurs, CSMs should strive to use customer churn as an opportunity for growth and action.
4 Step Action Plan When a Customer Churns
Here are some steps a CSM can take when a customer churns to recover quickly and ensure corrective action in the future:
Step 1: Review The Customer Relationship
Immediately after a customer attrition conversation, a CSM and his or her team should begin to review the customer relationship in depth. It’s important to analyze as many past interactions and conversations as possible. Reviewing an ended customer relationship is an opportunity to gather critical metrics and begin to set benchmarks. CSMs can measure this recent customer relationship against past ones to deduce patterns or trends.
For example, if a CSM discovers that a certain type of customer has a higher probability of churning at a specific point in the customer lifecycle, then it’s probably time to rethink the customer success process for that vertical or even rework the entire customer lifecycle process for all customers.
Step 2: Pinpoint Where Things Went Wrong
While reviewing the customer relationship in-depth, an intuitive CSM will be able to spot inconsistencies or issues in the customer journey. Customer churn doesn’t just occur when there is an error on the solution provider side, either. Attrition can be attributed to many things, including budget issues, internal realignment, and economic change. When a CSM knows where the turning point in the relationship occurred, he or she can then compare this moment to other customer journeys. Identifying where a customer journey ‘fell off the rails,’ so to say, also uncovers the easiest way to repair the issue and ensure it never happens again.
When it comes to customer churn, it’s okay to be direct and ask a customer why they decided to leave a relationship with your organization. Just don’t come off too defensive or forceful, and they will probably give you the straight answer you are looking for. Exit interviews also provide a great opportunity to get insight into errors straight from the customer’s mouth.
Step 3: Incorporate Findings Into Strategy Going Forward
Once a CSM has gone back through to identify any missed errors or red flags, it’s time to do everything possible to prevent any repeated issues in the future. In most cases this means heading back to the drawing board to revamp stale or flawed processes.
With all of the insights and metrics gathered after a customer churn, customer success leaders can actually measure certain strategies against success rates and determine what steps to take in nearly every situation.
Step 4: Share Your Insights with Other Departments
While it’s important for a customer success team to have detailed insight into customer churn, it’s also critical for the rest of an organization to have visibility into these findings as well. The last step a CSM should take after a customer churn is to share their insights with other departments across the organization. For instance, the product team should be kept aware of any critical product issues or errors that could have led to a customer churn. A sales team needs to know which messaging or conversations should be avoided and which to engage in, and so on.
Customer success as a culture is a company-wide mission, and it’s up to the customer success team to keep everyone on the same page. It’s also possible other departments could help a customer success team brainstorm solutions to churn issues. There could be a better way to introduce the CSM into the conversation during the end of the sales cycle, for example, or a more efficient way to discuss a new product feature.
Are Your CSMs Equipped to Handle Churn?
Customer churn is, unfortunately, an unavoidable occurrence in the world of customer success. What matters is how CSMs and entire organizations handle customer churn and what processes are in place afterwards to learn and grow from such a setback to prevent the leaky bucket in the future. How does your organization handle customer churn?
Check out our resources below for more customer success best practices and insights for how your organization can put customers first:
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