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If you have a user that hasn't been using your service for a few months and then they want to cancel, is there a good tactic to stop cancellation and reactivate them? Or have I already lost them and should have engaged sooner?

  • LM

    Lincoln Murphy

    almost 5 years ago #

    Whether or not the customer is a lost cause or can be saved, the answer will absolutely 100% include "but you should have engaged them sooner."

    I agree with @sean that it's important to be proactive and not let customer get to the "inactive" state... but it's critical to define "active" and "inactive" in a meaningful way by focusing less on time in the app (MAU, DAU, etc.) and more on whether the customers are on pace to achieve their desired outcome. More on that in this GH thread: https://growthhackers.com/active-users-are-a-vanity-metric/

    That said, this question wasn't just about inactive customers... but those that are inactive and have asked to cancel.

    We have to operate under the assumption that customers don't sign-up for products just to cancel a few months later. They have the intention of being successful - of achieving their Desired Outcome - with your product.

    More details on "Desired Outcome" on this GH thread: https://growthhackers.com/desired-outcome-drives-customer-success/ (this thread got NO play!)

    If they didn't achieve their Desired Outcome - or didn't feel like they were on the path to reach that - then we can either let them go or try to help them do what they originally wanted to do.

    There's a time and place for both, but I like to send everyone through a cancel flow. This GH thread has more details on that (along with other Retention hacks): https://growthhackers.com/22-ways-to-reduce-churn-with-growth-hacking/

    Sometimes simply having a cancel flow is enough to stop people from canceling. It's counterintuitive, but I think people sometimes just want to see the escape hatch to know that it's there and then they can relax. On more than one occasion I've experienced significant reductions in churn simply by making a cancel flow available.

    Of course you need to balance letting them go with keeping them from going. But, like everything we do, we should try to keep them from going in a way that's actually designed to help them.

    Get them to select a reason they're leaving and then show them the way to solve that rather than leave; it's actually in their best interest assuming we're acquiring customers who could be successful with our product in the first place.

    And if they decide to stay with you, it's now on you to help get them back on track toward success. Don't leave that to chance... make sure you orchestrate that process for them.

    If that means giving them a couple of months to course-correct for free, cool, though I wouldn't start there... again, paying you isn't the issue; it's about getting value. Help them do that and you're more aligned with what they really want.

    BTW, I'm not a fan of doing discounts here to try to save a customer as that can come off as either arbitrary ("oh, after paying you full price for 6 months and getting no value, now you say I can pay you less money? Thanks for the favor.") or just misguided because money wasn't the issue.

    But for the few customers that are totally a lost cause that move completely through the cancel flow or call/email and really want out...you'd be better off letting them go without a fight. Do what you can to make the situation pleasant, but just let them go.

    But... follow-up a few days later with an email to ask about their experience so you can try to learn from that situation. It's bad to lose a customer... its 10x worse to not know why. Its 1000x worse to know why and let it happen again... so learn and then act where appropriate

    If you try to gather feedback during the cancel process (aside from the intel you can glean from the path they took in the cancel flow), you may get some but it likely won't be that useful. You'll probably just irritate them and they'll answer with that context.

    I don't know... I really don't have much to say on this subject.

    • RG

      Robert Graham

      almost 5 years ago #

      Lincoln has a lot of great advice here.

      I'd add Garret Dimon's experience in http://garrettdimon.com/post/71637155240/understanding-cancelations.

      Rob Walling discussed this at MicroConf 2015 and how he decided not to collect this feedback at the time of cancellation because so many people gave angry or meaningless responses. His strategy was to followup with an email from himself (the founder) several days after cancellation and solicit honest feedback about what went wrong with the experience. People responded to those emails at around an 8-10% rate. He cited this in particular as a big reason they were able to find better P/MF and grow beyond a churn-induced plateau.

      I can also reinforce the idea that 'engaging sooner is better' with harshly won experience. I tried creating a product where the result for customers was a list of users of their product that were likely to cancel in the next thirty days. That list turned out to be accurate to about 85% of the cancellations, but recovery was difficult and expensive. Making the customers successful is much easier if you start before they sour.

      It's instructive to consider a scenario where you're on the receiving end of last minute attention. Perhaps you've tried to cancel your cell phone or cable service after a string of bad experiences and you indicate that on the phone. They will almost always send you to someone who has some authority to offer you discounts and convince you to stay, but I often feel less connection and trust with those institutions. It's clear they only care when I make threats, but not when I struggle or receive bad service. That is a terminal feeling.

      I think monitoring customer signup -> customer getting value (read "activation") is incredibly important. Onboarding is a huge part of that process and my favorite idea I've seen recently is to reuse those onboarding tactics to get successful customers further into your application. You can 'onboard' customers to higher level features, especially if you can see patterns of use to know where your stickiest and most valuable features are.

      To reinforce Lincoln's #2 point below, reaching out to help someone be successful is rarely if ever going to be perceived negatively or as a bother. Reaching out (somewhat cynically) to maintain MRR that is in danger often will be.

      To reframe where you may stand with these customers you must realize that they likely have an important lesson or two to teach you. Why they are canceling and how they arrived at that decision should give you ideas to improve your marketing, ideal customer profile, product, and/or onboarding that is likely more valuable to you than $X MRR. You need only make sure to learn and adjust.

      • PT

        pavneet tiwana

        almost 5 years ago #

        This is a great point. I totally agree that arbitrary feedback is mostly meaningless. It is important for the founder or some one else from the company to directly interact with the customer to get those insights. personal touch is becoming really important because there are just too many startups around. And personal feedback is crucial during the initial days

    • SK

      Srini Kami

      almost 5 years ago #

      This is awesome advise and info. Thanks.

  • LM

    Lincoln Murphy

    almost 5 years ago #

    A few more points to add....

    1. Retention starts by acquiring the right customers; those that can achieve success with your products. The seeds of churn are planted early, and they're often planted in the acquisition phase by simply working to acquire the wrong customers.

    2. Don't let your customers get to the point where they want to cancel. Obvious, right? Sure... but it's another one of those obvious things that people overlook all the time. Too often this happens because we don't want to "bother" our customers... unfortunately that's often because we don't want to remind them that they're paying us money; they might cancel!

    3. You should monitor pre-churn events; things like downloading data, checking out the cancel flow, looking at billing info, etc. Whatever makes sense in the context of your business (those things might not be churn indicators... or they could be. Context is everything).

    Not sure what pre-churn events to monitor? Look at what customers that churned out did before they canceled and see if there are patterns. Ideally you can see those patterns and proactively monitor for those going forward so you're notified of pre-churn activity.

    4. Activation/Onboarding is absolutely critical... in larger deals, first-year churn (or not renewing a contract after the first year) can almost always be traced back to poor onboarding experiences. It's not just critical to that first impression for the customer with your product, but it gets them invested (so there's a form of lock-in), and it gets them (on track) to achieve their Desired Outcome faster.

    More on that in this GH thread: https://growthhackers.com/the-secret-to-successful-customer-onboarding/

    5. The side effect of achieving their Desired Outcome is that customers will then expand their use, purchase add-ons, etc. and customers that have grown with you, especially by expanding the use of your product internally, are even less likely to churn out. If you can get them to advocate for you publicly, that's yet another reason for them to stay around, and that's generally only possible if you've helped them achieve their Desired Outcome.

  • RP

    Rich Pocock

    almost 5 years ago #

    This is like being an ambulance at the bottom of the cliff or trying to stop them falling in the first place. Obviously if you could retain before they get close to the cliff it's usually the better of the two options.

    In terms of what you could do. This usually comes down to a few things:
    1 - Can you identify when to start the retention process and who's a candidate
    2 - What are you going to do? Nudge, offer
    3 - How are you going to do it? email, phone call, remarketing, letter

    How I like to do things is manually try something, gauge success and automate from there. As every business is different, you might want to try a few things.

    • SE

      Sean Ellis

      almost 5 years ago #

      Hey Rich, I think the retention process starts from onboarding - which was the most important lesson that I learned from the Hubspot growth study https://growthhackers.com/companies/hubspot/.

      • RP

        Rich Pocock

        almost 5 years ago #

        Good point @sean, what i should have put would be identifying users who are likely to cancel or churn, rather than the retention process.

        An example might be users that use your service once a month are more likely to cancel on subscription renewal. Build a segment around these users and look at ways to get them to interact more frequently.

  • SE

    Sean Ellis

    almost 5 years ago #

    Great question @jessebouman ! Really curious to hear what @lincolnmurphy has to say on this one.

    Personally I think that it's much better to be proactive with inactive people and not wait for them to cancel. That's one of the key benefits of SaaS, you can see who is using your software.

    As I recommended on Twitter, I think that the best way to save someone who is inactive who is trying to cancel is to give them a free make good period. If they were inactive for 2 months, then I'd give them two months free after which time you can discuss the cancellation. I'd then work hard during those two months to help them find a valuable way to use the product.

  • NM

    Noah Manion

    over 4 years ago #

    Saw this reposted on Twitter today and I had to resopond. The company I work at got an email from a subscriber that said he clicked the unsubscribe link at the bottom of our newsletter (which is sent daily). He said that the content unsubscribe page made him rethink his decision to leave and that he's been talking about our brand to his family and friends since.
    The unsubcribe link takes you to a confirmation page that has a photo of everyone in the company waving and the text reads "Sorry to see you go, if you're interested in resubscribing, click this link".
    This case showed us that we were doing something right and that even when we had initially failed at retaining the customer, the way we said goodbye ended up retaining him and even turned him into a referrer.

  • almost 5 years ago #

    Naked Wines has a nice approach to reawakening their "angels". These are people who give them £20 a month to invest in new wine growers in exchange for discounts on the product line.

    If the angel doesn't purchase for a few months (in my case I reckon it was about 9 months) they get an email reminding them what their balance is and that they can withdraw funds if they wish. It's written in a non-sales way, so it comes across as a customer service message rather than a commercial one (and I suspect could be argued is exempt from DPA/PECR obligations as such).

    For subscriber models that involve pre-payment this could work quite nicely.

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