3 Reasons Your Customer Could Churn and How To Prevent It
June 25, 2018
June 25, 2018
For all product teams Churn is a painful topic. After all of the effort by the marketing team to attract a lead, your sales team to convert them and your support team to try and keep them happy, nothing hurts more than watching them churn and seeing all of that cost of acquisition walk out the door. To build your customer base, product managers need to focus on churn management and learning about why a customer churns and more importantly what solutions can be implemented to prevent churn in the future.
Here are 3 reasons you could be losing a customer to churn and how to prevent it:
1. Lack of convenience: The reality of building a product is that before the product existed, your customers were already accomplishing the task they needed. Your product is in someway making that task easier to accomplish which is why they are looking to take advantage of your product. If your customer is not finding your product easier to complete the task they need, they will churn and return to their previous process. This requires constantly looking at your user stories and use cases that you have designed your product to complete. Are there extra clicks? Added data entry? Have you removed all of the manual from the process that you can? Understanding this type of information can be challenging as it requires identifying churned or soon to be cancelled customers and getting their time for an interview on what are the pain points they experienced. Additionally, often you will get high level feedback such as “too complicated” or “not user friendly” and while this helps to paint the picture it does not have give you actionable, specific changes to make.
To ensure your product is streamlined and convenient for your users you need to implement a way for your users to provide constant feedback about their experience within your product. You need to look at data to see your users and their usage of the product to identify pain points and implement feedback capture widgets on common workflows to get feedback early and often from end users while they are interacting with your software before they reached the point of deciding to churn. Make it easy for users to make suggestions and ensure you implement their change or reach out to them to close the feedback loops so they continue to provide feedback in the future. Once your product has become more convenient than their alternatives, it will be a no brainer to stay with the product and not churn.
2. Lack Of New Features and Stagnant Product: Users live in a changing environment and everyone understands that while no product is a perfect fit for anyone they are generally okay moving forward with a product that satisfies most of their needs understanding that the remaining feature gap can be closed over time. As a result, your customers expect to see your product roadmap and that you are still building out features to make their life easier. They want to see you stay current with the needs of their industry that you support and as a new opportunity arrives in their space, your product will be quickly adapted to support that feature. To be a successful product team, you need to show you are still working on the product and that there is more to come. If you are become stagnant, your product will show it and your customers will eventually look elsewhere as everything becomes outdated including front ends, features and the technology products are built on and unless you are active and communicating to your users your roadmap, they will become concerned and look to move on.
To prevent losing customers to churn from lack of features, you need to show your customers that your product has a roadmap and where it will be going in the future. This product roadmap should show the planned features you will be adding in the future in broad windows of time such as each quarter of a year what you plan to add to the product and once released, updating your customers to know that the features are available. Communicating your future plans and what has been released will go along way to helping curb churn especially if you are working in customer driven ideas as some of the features you are adding to your product roadmap.
3. Your competition Is Better: As a product manager you need to be keenly aware of what your competitive landscape looks like and know where your strengths and weaknesses are when you get stacked up against the rest. If you are unaware of your competition you may become blind to a trend in your space and be the last to market to adopt a key feature that is needed. As a product team you do not have to always be the first product team to launch the feature but once a feature is available, you need to ensure you adopt it if that is what the customers in your space are looking for. Also, the more you know your competition the more you understand your differentiation and how you can better market your product. Churn will occur when ultimately there is another product that offers more or easier to use features and especially when it can be at a lower price.
How to prevent churn based on competitors is to always maintain a competitor comparison page knowing what gaps exist and track within your own ideas and features the key changes you need to implement to stay competitive. Ensure that as a product you maintain a business objective to maintain competitive advantage and ensure you prioritize key features into releases that are needed to stay at the top. Remember, most of the time, it is okay if you do not have the feature right away as long as you are communicating your product roadmap to your customers and they can see it is coming in the future. Changing products can be painful for users. More learning curve, transfer of data, setup and at the end of the day, many people do not like change. Give customers a reason to stay and not leave to a competitor by showing them on your product roadmap that you plan to compete with the feature they are looking for.
Churn management is a part of product management in that key features and communication of those features is what drives conversions and churn. The ability of a product manager to constantly get feedback from users about the product and fix nagging product issues, communication between the product roadmap and users to show that you are constantly working on making a better product and the roadmap including any key competitor features are great steps to start reducing churn and keeping the product growing.