Understanding and addressing users’ needs and struggles are essential for business success. A specific type of survey – churn surveys, designed for customers who have stopped using a service, can provide a wealth of insights into customer behavior. But the real value comes from turning these insights into actions that drives sustainable growth and revenue.
One powerful technique this article explores is ‘Assigning a dollar value to customer problems identified through churn surveys’. This method can also be applied to other survey types such as CSAT, NPS, and other VOC tools. By quantifying the Financial impact of various problems, businesses can prioritize which issues to tackle first. This not only address the most pressing concerns but maximizes profitability.
The first step involves examining the primary question of the survey, such as the main reason for the cancellation. The feedback result can then be quantified in dollar terms considering whether the first question is compulsory for all users or optional. For example, if the churn reason is that the subscription is too expensive, one can calculate the revenue loss by multiplying the number of churn users, the cost of the subscription per churn user, and the number of months.
It’s important to add follow-up questions to gain deeper insights into churn reasons. For instance, if a customer cancels the subscription because it’s too expensive, a follow-up question can reveal whether the issue relates to its cost or its value. After identifying the detailed problems, businesses can quantify the absolute financial impact of these. Potential solutions should then be devised for these issues.
For instance, when customers cancel subscriptions because they don’t require it temporarily, offering a ‘pause subscription’ option could be a meaningful solution. It would allow customers to retain their subscription without the burden of ongoing fees during a period of non-use. Studies have shown that this option can significantly reduce churn rates, fostering customer loyalty.
For users who aren’t realizing the value of the subscription, it’s important for businesses to reassert its benefits. Regular reminders about the benefits, running marketing campaigns that highlight the value, providing tiered subscription plans, flexible billing, and incorporating onboarding tools to help users realize the value quickly can be effective approaches.
For customers who are churning due to price sensitivity, discounts, and offer take-up rates in the cancellation flow could potentially save up to 20% of the ARR.
A thorough analysis of follow-up questions for churn reasons can lead to a superior understanding of the root causes of churn. These insights can form the basis for creating robust, customer-centric solutions that address specific needs while ensuring sustainable business growth. The process of quantifying customer problems also ensures that product development efforts yield maximum returns.
