Did Your 2021 Churn Prevention Strategy Produce Results? This Is The Right Time To Plan A New One
Customers join in and leave. It is part of every business. The only difference in the case of the subscription business billing model is the recurrent sales and purchase and data from these recurring sales that makes revenue predictable. However, when too many customers leave, it is an immediate concern for it affects revenue predictability and the flow of revenue itself.
No matter how effectively you manage SaaS subscription business, customer churn or subscription cancellation is part of the game. But it becomes a bottleneck when:
- Too many customers leave at a time.
- Your loyal customers cancel their subscriptions.
- New customers join in and do not stay on board for long.
If your 2021 churn prevention strategy failed to help you overcome the mentioned above points of concern, then it is high time to mull over to come up with a new strategy for the coming year.
We brought our marketing and sales team to the same table to suggest a few things that can help people in formulating a strategy that can reduce churn and increase the customer lifecycle with you.
Also Read: A Step-By-Step Guide To Deal With The ‘Unsubscribtion’ Obstacles
Subscriber Churn Rate Calculator
Before we take you towards the details of a churn prevention strategy, it is better that you have your formula to calculate customer or subscriber churn. Usually, customer churn is calculated at the end of the month.
Customer churn = (the number of customers at the start of the month- number of customers who left) / subscribers at the beginning of the month
You can multiply the value by the 100 that you get from this formula so that you get the percentage of customers who have left the platform.
Use this formula to calculate the customer churn rate per month. It will show you a timeline of the performance of your business based on the customer churn. If you find that you failed to perform as per the expectations, then follow this article to improve your customer churn prevention strategy.
Rework on Your Buyer Persona
Buyer personas are the description of the ideal customer and they improve your understanding of your targeted customers. Even if you have buyer personas and your churn prevention strategy did not work this year, then you need to revisit these subscriber personas. You probably lack at the customer data tracking side.
You have done your part.
Let SubscriptionFlow take it from here!
subscription management software.
The customer data trail reveals many things e.g purchase habits that you can use to improve buyer personas.
Also, find the customer pain points and for that, you can conduct surveys and extract the issues that most of the customers are facing in the marketplace. Observe what your competitors are doing to fight these problems of customers.
Also Read: Track The Data Trail Of Your Customers And Grow Subscription Business With SubscriptionFlow
Roadmap for New Customers
We have written thoroughly about it in our previous blogs that customer churn can significantly be reduced if you work on your customer onboarding strategy. Experts say you should focus on onboarding loyal customers rather than making your customers loyal.
When it comes to turning potential leads into loyal customers, you will need a roadmap for new customers. No matter how effective your product & services are, customers should understand that how to navigate the new system. Your demos and training sessions should be planned in a way that the transitioning for the new customers become easier.
Many businesses send welcome emails to their new subscribers. If your business demands, you can attach the links to demos with these emails so that transitioning is smooth for the newly onboarded customers.
Also Read: How to Formulate an Ultimate Onboarding Strategy to Get Happy Customers
KPI Monitoring
SubscriptionFlow is one of the best recurring billing software that provides its clients with the feature to monitor the performance of Key Performance Indicators (KPIs). Customer churn rate is itself a KPI, however, its performance depends on the following important indicators that can help you reduce the number of customers leaving your platform.
- Average Revenue Per User (ARPU)
- Monthly Recurring Revenue (MRR)
- Customer Lifetime Value (CLV)
Here, you need to understand that how these KPIs interlink and impact the customer churn rate. ARPU is usually the amount of revenue that is that you get per user. According to the experts, higher ARPU customers benefit the subscription businesses because they are the source of more revenue. Also, they are more loyal to the platform.
Just like when Customer Lifetime Value (CLV) performs better the customer churn automatically reduces. How? CLV shows the net profit that you can earn from a customer. CLV will improve when there is customer satisfaction.
Customer Engagement
It is not entirely wrong to say that today customers are quite demanding. They need care and want to feel they are valued. Do not even think that you marketed your product well, you succeeded in turning a lead into a customer, you have given them demos and training, and now they are on their own.
You need to constantly engage with your customers. Communication not only reduces the churn rate but also helps in cross-selling and upselling your product to the same customer base.
At present, there are numerous channels where you can connect with your customer and you need to make sure that you connect with your customer on all these platforms. Moreover, ask new customers to share their experiences with you. Their initial experience will help you in understanding the behaviour of new customers and reduce the number of customers who leave your platform.
There are numerous ways to reduce customer churn and ensure a longer stay of the customers. For instance, dunning is considered quite an effective way to recover payments as well as make annoyed customers stay onboard. It is a wonder of effective communication.
Also Read: Why & How After sale Services Can Enhance Customer Retention For Subscription Business
However, your customer churn reduction depends on the findings that you get from your 2021 strategy. Points that are shared in this article will surely be of help in 2022 to fight customer churn. If you are looking for an effective subscription management software, then SubscriptionFlow is the one. It offers all features that you need to make your customers stay on board for a long long time.
