Why you need to call your churning customers (and how to do it right)

by Steli Efti

It’s hard to confront failure. When your customer cancels, the last thing you want to do is talk to them.

There is real fear in phoning someone up, knowing they are going to criticize you. What if this is just the first of an avalanche of cancellations? What if they point out a fundamental flaw in your product? It’s easy to concentrate on what you do well, and leave these terrifying doubts alone.

But that same reason why it’s so hard to talk to your canceled customer is the reason why you absolutely must start calling them: you need to learn the truth about your service, and you need to know now.

Why your customers churn

Fundamentally, there’s one single, harsh reality behind your customer cancellations: You are not providing value.

This failure comes in two flavors:
  1. Your product doesn’t give them the features or service they need so you're not providing literal value to your customer, or
  2. The value of your product is hidden somehow and they can’t see why they should continue to pay for it, so their perceived value of your product is low.

Face up to that, and you have an opportunity to save and grow your company. Hide from the truth, and you won’t just have lost a single customer—you’ll lose your entire business.

It turns out that avoiding discomforting information is a trait that can literally kill you. Research has shown that some people will avoid unpleasant information to an extreme, even when it puts their life at risk, such as by not getting a cancer screening. These people selectively expose themselves only to information that’s favorable to them, preferring to be validated rather than correct.

Don’t hide behind your desk and only hear what you want to hear. Be brave, and call your churned customers to learn exactly why they churned.

Sure, some of the issues will be unavoidable, like having your customer go out of business, and that will hurt because there’s nothing you could’ve done to stop it. But you’ll find that the vast majority of issues will be avoidable—things like product or support problems—and that’ll turn a depressing conversation into something that's incredibly empowering.

churningcustomers

Here’s how to call your churned customers and turn your learnings into changes that will give your business a chance at success.

How to start the conversation

Get your churned customer on the phone. Only do email as a last resort. Having a real conversation with your departing customer is integral to learning something meaningful from the exercise. It’s all about going deeper, asking questions, and coming to a real, detailed understanding of your customer.

Start with this:
  • “Hey, I wanted to personally take the time to reach out. I saw that you just cancelled the service, which I’m really sad about, and wanted to find out what happened. What we can do better, and what we can do for you today?"
  • “Is there anything I can do for you so that what happens next creates the maximum value for you business?”
  • Continue asking open-ended questions to find out what the problem is and drill down into the specifics of their issues.
There’s one crucial reason why the focus of the call is to create value for your churned customer: if you’re making first contact now, you’ve already missed the warning signs.

You’ve missed the months of the customer logging in less and less, plummeting usage stats, even multiple downgrades prior to total cancellation. Your customer has been paying you and you haven’t been delivering value.

That’s the situation that this call is meant to take a step towards rectifying.

You must show them that you want to find out what happened, and take responsibility for what didn’t go right. In the process, you’ll learn not just what you can do in the individual case, you’ll take away the invaluable learning of how to build value for your customers going forward.

3 key areas of your business you'll improve by learning from churned customers

Most people will tell you that you have to call churned customers because it’s an opportunity to win them back—but that’s 100% the wrong approach. It will lead you astray and misplace your focus on closing deals and extracting short-term value.

Put your complete focus on learning how you can deliver more value for your customer. Those learnings are going to serve you well in the long-term. Only incidentally might you find that the best way to bring value to your ex-customer is to get them back on the product—and if that’s the case, close the deal.

If you don’t discover a way to keep them and keep them successful, let them go. It doesn’t make sense to pressure them into staying for another month or two. They’ll churn eventually and when they do, they’re going to be a lot unhappier than they are now.

Always act in the best interest of your customers, and keep building value in these 3 areas of your business using your churned customer’s feedback.

Your sales process didn’t work

It’s surprising, but you’ll find that a ton of your customer relationships were doomed from the get-go. They were a good fit for the product but it was only a matter of time that they churned.

This typically happens as a result of selling to a customer before you really go deep with them to figure out what the problem they want to solve is and how the solution to that problem should work for them.

You need to do the work now that your sales process should’ve done up front. You’re likely to find out that:
  • Your product solves a related problem but not the specific problem the churned customer has.
  • Your customer wasn’t deploying your product towards a strategy that had a likelihood of success.
  • Your product didn't fit into their workflow.
  • The customer’s pricing tier wasn’t a good fit for their needs.

Do this one thing to change your sales process: qualify your leads better. Your sales team shouldn’t be doing this:

Sales person: “What is really important to you?”

Prospect: “What we need is a way to get metrics on our sales emails.”

Sales person: “Guess what, our product offers sales analytics!”

Train your team to go deeper.

Sales person: “What is really important to you?”

Prospect: “What we need is a way to get metrics on our sales emails.”

Sales person: “Why are you tracking metrics on your sales emails? What kind of metrics do you want to track? How are you going to use the metrics?”

Keep going until you reach an understanding, and you feel confident that your product will deliver value so that your customer will find success using it.

The reason why this is so important is that you want to focus 100% of your energy and resources on customers who have a chance to succeed with your product. Diluting your pipeline will waste your time and money. Worse yet, it will confuse your team on who your best customer is and what the solution exists for.

Your support structure failed

It hurts when you hear from your customers that they didn’t feel supported, saying: “Every time we struggled or needed help, you didn’t support us or helped us too late.”

When you hear that, you'll immediately want to jump into your support process and fix things. That’s understandable, but before you do that, pause for a second.

The easy answer is to just make your support better, but that’s often not the right answer. Consider these 3 possibilities as the root cause behind a negative customer experience:
  • Mismatched expectations: Customers can have different expectations on support levels from what you offer, and that can result in customer frustration. Adjust your sales and marketing to better manage expectations around whether you offer one-to-one support at all, wait times, and in-person customer success and consulting.
  • A failure in sales, marketing, onboarding, or product: You’ve brought on the wrong kind of customer (say, a non-technical person for a developer tool) or your product has some nasty bugs. Better support doesn’t get at the root cause of a negative customer experience.
  • Bad support: It’s just support. If your response times are too slow or the quality of your support isn’t sufficient, dig into the support process, remove bottlenecks, and make whatever changes are necessary.
Think about this all in the context of your business. If you have a frictionless SaaS product, the economics of your business might not justify a top-notch support team and close customer hand-holding. Instead, you’ll want to make the support level clear in your pricing plan and use that to segment your plans into a prosumer or SMB plan and an enterprise plan with higher support and 2x-10x the price.

You product didn’t inspire

When you hear, “Your product doesn’t do X, Y, and Z,” and you know that it does, don’t immediately shout, “But we do have X, Y and Z!”

Take a deep breath, and ask, “Tell me more about X, Y and Z. What do you need X, Y and Z for? How does it need to work? What does it need to accomplish?”

When you find out their exact problem, if you see the following two scenarios, bring the churned customer back:
  1. They didn’t know about a feature that you have that solves their problem. Their perceived value of the product was low, but the literal value of the product for them is high because you do solve the problem. If that’s the case, then you should say, “We can do this. Sorry we missed the opportunity to do this for you, but maybe we still can. Let me guide you through it, here’s what the product does . . .”
  2. You have a new feature coming on the roadmap that solves their problem. A good rule of thumb is if the feature is coming within a maximum of 2 weeks. Then, say to them, “We’re actually about to release this. Let me understand a bit better how exactly you need that feature to work, and we can see if it matches what we’re developing.”
In these two cases, it’s in the best interest of the customer to stay, and now is the time to make a passionate pitch for your product. Help them avoid the “grass is greener” trap that tempts them to switch to your competitor by emphasizing that you’re a known entity, while starting a relationship with a new provider comes with a ton of unknowns and risk.

Sometimes, they need to go

You might hate the idea of calling up people who are unhappy, who are going to tell you what you’ve been doing wrong and why they are taking their business elsewhere.

Worse yet, the right way of talking to your churned customers means not accepting surface-level explanations for what happened. You’ll have to dig deep into the painful reasons why they canceled to get the root cause of what’s not working.

But what makes it so tough is also the reason why it’s going to be a huge reason for your success. You'll take that feedback and learning and pull it back into the product, sales, marketing, support, and all areas of your business, making sure you make more and more customers successful.

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