5 Tips to Reduce Customer Churn

To Reduce Customer Churn, First Understand its Drivers

Among the most concerning outcomes for all enterprises, especially SaaS startups, is churn, defined as the number of customers abandoning your product after a specific amount of time. Why does it happen, and how can you reduce customer churn? Let’s review common reasons and struggles companies face when trying to increase adoption and retention.

Why do Customers Churn?

There are several reasons why customers may decide to stop using your product:

• Customers are too busy to learn how to use your product.
• Users are a great fit for your product, but they lack an internal product champion to convince them of its value and ease adoption.
• Users are looking at your competitor’s offerings, even after they’ve purchased your service.  
• Customers are simply disengaged and don’t see the value in your product.
• Customers are finding internal ways to do what your product does out of frustration over not knowing how to get the most from it.
• In some cases, customers abandon without leaving any clues as to why.

These issues make it difficult for companies to prevent and reduce churn consistently. There are a few reasons for this, including the lack of the proper tracking metrics, or customer success or implementation teams are not being trained to spot issues. Also, leadership may not be communicating the value of the software and why it was purchased. If you’re facing these challenges, the tips in the following section may offer some solutions.

Related: The New Formula for Customer Onboarding: Preventing Customer Churn and Driving Product Adoption

5 Tips to Reduce Customer Churn

Prior to applying the five tips listed below, there is one universal tool for understanding customer churn: Analyze customer data, including product usage.

As  Gainsight explains “Product usage analytics don’t just help you increase adoption; they sound the alarm on potential customer churn. And that’s critical if you want to build out a loyal customer base and ongoing revenue. After all, almost 60% of SaaS leaders say customer renewals are a high priority.”

Establishing metrics for customer onboarding (including Time to Value – TTV and Customer Satisfaction scores – CSAT) and continued engagement and expansion (including Net Promoter Score – NPS and customer support ticket volume) is essential for creating benchmarks against churn and retention.

Once you have your metrics set, look to these tips to help reduce customer churn:

Establish a Proactive Communication Strategy

As discussed previously, there is no one way to reduce customer churn because there are so many types of customers and product issues. Ensure that your sales, marketing, customer success, and customer education departments have a streamlined system to automatically share data about the product and customer behavior that can detect potential churn early. Every team in your company needs to be connected and communicate with each other.

Empower Your Customer Success Team

Implement a structured training system for your customer success team that continues to keep them updated on new product features and how to explain them to customers. This process can be made easier with the right technology and tools to help CSMs do their job. Keep in mind that automating processes, enhancing service quality, and tracking the right metrics through customer success software can increase customer lifetime value and help them feel taken care of, thus, significantly reducing churn.

Evaluate Your Customer Journey

Closely observe the customer journey, especially as new customers come on over time. Don’t assume what’s worked before will continue to work as customer needs change. Identify potential points where customers may become stuck, where they may need additional assistance, or where they may be able to get even more value out of the product.  (See this guide from Salesforce to learn more about Customer Journey mapping.)

Monitor Your Competitors

Your competitors may launch attractive promotions or updates to their products from time to time. When not closely monitored, these actions can capture many of the customers who have not engaged with your brand. By identifying these launches early, you may have time to implement measures that can ensure your product is competitive and reduce the potential of customers following the “next shiny penny”.

Begin or Enhance Your Customer Education Program

One critical solution to reduce customer churn is to provide education at all stages of a customer’s lifecycle. In order to ensure your products and services are accessible, you can provide training and resources along the way, starting with customer onboarding. As a result, you will increase time to value, adoption, renewals, and lifetime value.

After customers buy your product, you can earn customer loyalty by educating them quickly and consistently. Offering on-demand education can help you maintain valuable, long-term relationships with customers and reduce customer churn.

Related: 7 User Onboarding Best Practices

Customer Education’s Role in Reducing Customer Churn

Increased adoption and lower churn are two of the most important goals of customer education. At Skilljar, we believe trained customers are better customers. Overall, you will reduce customer churn when you implement or improve customer education because:

• Your customers will quickly learn about your product, resulting in faster adoption.
• Your customers will experience a better, more comprehensive onboarding process.
• Users will understand how to use and get the most from your product faster, producing better time-to-value results.
• Customers will learn how to use and get value out of any new features you roll out, increasing their loyalty.
• Customers will be able to find new ways to use the customer education platform to meet their specific training needs.
• Once customers start to see results, they will become product evangelists within their company, making sure management understands the value of the platform in meeting these key goals.

Customer Education Technology to Help You Reduce Churn

If you want to reduce customer churn through scalable customer education, you have to rely on technology, but be selective with the software you choose. Only those platforms that provide dedicated external customer training solutions (vs. those that try to build onto your existing internal training applications) offer a superior user experience for customer education.

Internal employee training and external customer training serve very different purposes and therefore, each deserves its own training platform to ensure the best return on investment.

An external customer education technology partner can create a seamless, scalable, and more effective way to onboard and train a growing customer base. Consider features such as learner tracking and reporting,  and data integration with your CRM, marketing automation platform, and help desk software.

In addition, customer education software makes it possible to develop multiple training modules targeted at different groups of users. You can customize education with on-demand, online courses, videos, quizzes, and other content formats to best meet an array of user needs where they are and how they prefer to learn.

Related: Choosing the Right Technology for External Training

With Skilljar, enterprises are transforming the way they engage with customers. Our simplified customer training solution has paved the way for satisfying customer education, engagement, and enablement needs. With Skilljar, you can educate, onboard, and retain customers at scale, keeping users happy and reducing customer churn. Request a demo today.