Churn Analysis: 7 Tips To Improve & Win Back Lost Users

Churn analysis helps you win back customers while simultaneously improving your product. 

But knowing what areas to focus on specifically so you can swoop in just in time and keep these users for life? Yeah, now that’s a challenge.

Let these startups and agencies show you how it’s done.

Table Of Contents

Quick Recap: What is Churn Analysis?

Churn analysis is the process of analyzing your data to understand why customers stop using your product

It’s calculated using this formula:

[Lost customers] / [Total customers at the start of a period] x 100%

Note that churn comes in various forms.

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Source: Custify [There’s revenue churn, gross churn, net churn, to name a few]

Based on our conversations with the startups and agencies in this list, it’s recommended to conduct a churn analysis every month.

Why is Churn Analysis Important?

Churn determines the success of your company. 

If you have a high churn, you spend more on acquiring customers, leading to lower revenue.

Eric Carrell, the chief marketing advisor of Surfshark, shares with Breadcrumbs, “The more clients you lose, the more money you’ll have to spend on seeking new ones to make up for the lost revenue.”

Brian Dean, founder of Exploding Topics, expands on the repercussions of customer churn:

“Customers that leave because they aren’t getting excellent value might cause long-term damage to the business, such as negative word of mouth or online reviews.”

Marcin Stryjecki shares a similar sentiment. The SEO project manager at Booksy explains that it’s one thing to know you’re losing customers, but quite another to understand why.  

“Churn analysis helps you figure out why customers are waving goodbye to your brand, so you can get to work on reversing the churn.”

How Do You Analyze Churn Rate?

1. Catch “At-Risk” Customers with Churn Analysis Tools

It’s a next-to-impossible task analyzing churn manually.

As Eran Galplerin puts it, “The biggest problem is tracking users who are about to churn but don’t communicate their problems.”

It’s the main reason the Martial Arts on Rail founder uses a churn analysis tool to track his key account performance indicators (KPIs). In his case, it’s ticket velocity, customer satisfaction, and progress in onboarding. 

Any drop in these KPIs will signal that a customer might churn soon and prompt the team to reach out and offer help.

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This check-in email from Martial Arts on Rails creates an empathetic touch

Churn analysis tools such as Breadcrumbs help you identify customers at risk of churning, so you can catch them before it’s too late.

Connect your data source(s) to score your subscribers based on their online activities. Breadcrumbs will automatically update the fields accordingly. 

Screen Shot 2021 08 16 At 2.35.39 Am

These contacts in your email list will be sorted according to Breadcrumbs’ co-dynamic scoring system, surfacing customers who are about to churn.

Book a demo on Breadcrumbs today to learn how you can catch customers before they churn.

2. Analyze Churned Customers by Cohorts 

When you look at your customer data in segments, you can easily spot recurring patterns.

Oliver Feakins, who runs Trusted Search Marketing, goes deep into the demographics. Company size, pricing plan, spending power, location, industry, contact person, and market, you name it.

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Breadcrumbs Scores Your Customers’ Demographics And Other Personal Data (Called “Fit Rating”) Based On A Score From A To D, With A Being The Perfect Fit

He shares with Breadcrumbs, “Not only do we conduct churn analysis to identify which and why clients are leaving, but we also look at the type of clients who are staying and upgrading.” 

After crosswalking the data with the information of every client’s company, Oliver then ties them in with specific circumstances. This can be internal issues or external issues like the contact person changing or engagement rate dropping.

Pro Tip: Make the most out of your churn analysis. Go beyond the features that turn away customers. You also want to identify which are the fan favorites.

“Churn analysis by behavior might uncover crucial patterns related to your product’s features.

Customers may churn as soon as they use a certain feature. In that instance, your product and engineering teams should dig deeper to find the problem and provide a solution.

On the other hand, if specific features help to retain clients, you should focus on upgrading and promoting them

Consumer behavior analysis is also a fantastic way to acquire a better knowledge of customer engagement.”

Brian Dean, founder of Exploding Topics, on using churn analysis to identify problematic and fan-favorite features

3. Review Common Issues in Support Tickets

Churn rates correlate with support tickets

“Whenever the churn rate goes up, there is a subsequent increase in support tickets,” reveals Ruben Gamez, the founder and CEO of SignWell.

Support tickets are a goldmine in figuring out what’s going wrong. They’re both qualitative and quantitative analyses. There’s room for figuring out why people are leaving.”

Example:

Let’s say you have an onslaught of queries about a specific feature. 

Initially, you didn’t get it. There’s already a product tour video in the first stage of onboarding. Surely the users watched it and figured it out by themselves? 

Alas, that’s not the case at all.

Upon digging deep into the support tickets, you discover that most users skipped the video. The  biggest reason? It was too long.

With these new insights, you might replace the product tour video with an interactive walkthrough or a personalized product demo to activate these users.

This is a simplified scenario, but it proves the importance of reviewing your support tickets in detail.

4. Survey Your Churned Customers (And Win Back These Lost Users)

Bryan Philips advocates surveys, particularly during the unsubscription stage.

The head of marketing at In Motion Marketing shares, “By asking a few simple questions, we can understand more about what the customer didn’t like.

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Source: Baremetrics [Here’s a cancelation survey that coaxes churned users to share their feedback]

RecurPost requires customers to enter their reason for canceling in at least 20 characters.

“When we didn’t have a limit, users typed ‘NA’ or ‘Sorry.’

When we made it 20 characters long, they lost track of how much they had typed and started sharing meaningful answers. 

The decision was based on a whole lot of gut feeling and 0 science.”

Dinesh Agarwal, founder of RecurPost

Since then, the social media scheduler startup has reduced its churn by almost 50%.

Whether it’s too many emails, irrelevant content, or lack of interest, your survey results will help shape your future marketing. For instance, complaints about irrelevant content might signal that you need to start segmenting your customers.

Reach out with personalized deals or savings,” adds Bryan. “This can be based on past purchase data you have from the customer or general promotions for long-time customers.”

Exit surveys are powerful

For Ruler Analytics, the feedback in these surveys created opportunities to build new features and change its processes.

Dave Smithbury, the head of growth, shares, “This has led to reactivations when we’re able to go back to customers and show we’ve listened and done something about it.”

Here’s a reactivation email from Sleeknote that talks about the latest feature. Note how popup builder startup backs it up with social proof.

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Source: Baremetrics

Not all is lost when customers churn. Both Ruler Analytics and Sleeknote prove that there is a way to win them back.

5. Go Old School: Check In!

Not all customers churn because of a product’s features. According to Rich Kahn, co-founder and CEO of Anura, sometimes it’s due to unforeseeable circumstances.

The startup, which offers ad fraud solutions, conducts churn analysis every quarter.

Interestingly enough, Anura doesn’t touch its support tickets during churn analysis, as it has yet to lose a client “due to product, lack of features, or anything related to the experience of the product.”

Rich explains, “When we have lost clients in the past, it’s due to changes on the client’s end, such as the client passed away, the business has gone under, or the business models have changed.”

But that’s not to say the Anura team can rest easy. The team is incredibly proactive.

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The CS team reaches out to customers monthly, and the CEO checks in quarterly.

6. Understand the Context Behind Churn 

Context matters.

Just tracking churn alone will invite a lot of overwhelming questions. 

Yes, you want to track leading indicators like user engagement and product usage. But to ensure you’re consistently providing value to the client, you need to look at other metrics or factors.

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Source: ChartMogul

Dave Smithbury, the head of growth at Ruler Analytics, clarifies, “It’s good to understand the context behind churn and present this to the board as it often gives the opportunity for us to assess our strategies going forward.”

When Ruler Analytics onboards a new customer, the customer success (CS) team doesn’t only look at how the product fits in with their customer’s business. The CS reps also take into account the customer’s: 

  • Tech stack
  • Complexity of requirements
  • Level of understanding
  • Technical expertise, and
  • Communication

These indicators will then derive a score, which determines how the CS team manages the relationship throughout the client’s journey.

Similarly, Force by Mojio analyzes its churn rate in context—in this case, with customer retention

Daivat Dholakia, the director of operations, shares: 

“If we have a lot of churns, we’re not building an effective enough brand. To look at the overall rate, we examine how many customers we have in a given month against how many are brand new. We compare that across months to determine our churn rate.”

The GPS fleet management startup aims to retain 30% of our customers minimum. 

Daivat adds, “When we drop beneath that, we start sending out satisfaction surveys and loyalty rewards.”

7. Evaluate Your Sales Reps

Earlier in this post, we talked about analyzing your churned customers’  demographics and tying them with external circumstances.

Now, what about internal circumstances?

In some cases, churn could be a result of your company’s sales performance.

At Trust Search Marketing, Oliver looks at the sales reps who onboarded the churned customers and the account managers who supported them. 

Regarding his process, he says, “We’re experimenting with custom fields that we added into our CRM which export to the custom database we created. We then have custom analysis built into that database.”

Tie these metrics and see if you can spot a pattern. Maybe it’s setting the wrong expectations right from the start or creating a flawed hand-off process that led to a disconnected client experience. 

Using this data, you can improve not only your sales processes but also in support and onboarding

Conduct Churn Analysis with Breadcrumbs Today

Get together with your team to analyze your customer data every month. 

Dig deep into why customers are leaving and improve your product for maximum impact.

Who knows, you might attract new users. Who knows, you might win these churned customers back. Who knows, you might even solve one giant issue in your company and accelerate revenue growth.

Book a demo on Breadcrumbs today. We’ll show you how to build your predictive scoring model and easily identify customers who might churn, so you can swoop in just in time and keep them for life.

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