Three ways to use data to reduce customer churn

25th May 2015

Businesses spend most of their time & money to attract new prospects and turn them into customers. If you don't retain your customers, all this effort is wasted. High customer turnover - also known as customer churn - can cost you marketing and sales resources, slow down revenue growth and hurt your brand.

Here are the three ways to reduce customer churn for your business, using your data:

Improve user onboarding using customer activity data

The most common reason for high customer turnover is poor customer onboarding. It may be due to customer confusion about how to use your product or service, high volume of customer assistance calls or emails and high churn rate among new customers.

To improve customer onboarding it is important to collect data about customer clicks and actions. Collecting data about every customer click and action enables you to spot these risk factors early on. Are the new customers accessing too many help pages repeatedly? Are they getting stuck during initial onboarding? Have they been unable to explore the key features of your product or service?  If so, then you are losing customers due to poor onboarding processes.

The first step towards fixing the onboarding process is to analyse customer behaviour data. Which help pages are being accessed the most? At which onboarding step are your customers getting stuck most frequently? What is the last action or task performed by each customer before he/she abandons your product or service? Once you find out the cause of churn, you can respond quickly. For instance, if your customers access help resources regularly , you can develop videos, quick start guides and product walk-throughs to make it easier for them to understand your product. Identifying the bottlenecks in your onboarding process can help you fix it faster. If you find out the onboarding step where they get stuck most frequently, you can simplify it by breaking it into smaller steps and providing in-place demos and tooltips.

Look at product usage data to identify customer pain points & required features

Another leading cause of customer churn is an underperforming product. Customers turnover because they are unable to find a feature they are looking for or unable to understand how to use your product to accomplish a task.

To address this, you can begin looking at the product usage data and collecting feature requests from customers. Usage data can provide insights about which features are used the most, which ones are being underutilised or not used at all. It also helps you find out which customer groups use which features the most. Dig into the emails, support tickets & bugs reported by your customers to find out common pain points. Talk to customers about their pain points and gather data on underperforming and requested features. It can tell you how customers use your product and if your features are able to solve their pain points. You can use this data to identify at-risk customer groups, and build a better product roadmap that deals with customer churn.

Analyse customer support data to build better customer relationships

One of the most common reasons for high customer churn is poor relationship building. It can make customers feel like a wallet instead of a valued customer.

Invariably, every customer has some question or the other about your product or service. When your customer success team is unable to quickly provide the right answer to their questions, they tend to drop off. You can analyse the data from chat logs and customer support calls to find out the most common reasons why your customers abandon your product or service. It allows you to easily identify the frequently asked questions, areas which need additional resources and support agents that can benefit from additional training. You can even speed up support by automating frequent responses and creating a knowledge base. This helps you improve your product or service, improve customer experience and reduce churn.

Generally, customer success teams are tasked with not only identifying, but also going after upsell opportunities. This can end up turning them into salespeople and undermine the relationship with the customer. Instead of crediting customer success teams for sales, the organisation can measure the number of qualified opportunities that customer success professionals generate. In this case, account executives or an upsell team can monitor CRM data on opportunities from the customer success group and follow up, crediting customer success team for the leads that make it to the qualified stage.

You can create a simple customer support dashboard to regularly monitor the status of your customer service. Reviewing it daily or weekly will show you the performance of your customer success team. It will help you measure customer satisfaction, identify areas of improvement and act immediately. You can add more metrics to it when you need to track more information.

Sreeram Sreenivasan is the founder of Ubiq.

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