Rising inflation have made customers even more aware of spend and provider choices. Combined with the importance of maintaining a good reputation, it has become more important than ever to retain customers and create strategies that fit your customers’ needs.
Luckily, your customer conversations contain valuable knowledge. You can not only use this knowledge to base new initiatives on customer feedback, but you can also use it to proactively prevent churn, as there are often clear indicators among customers deciding to cancel subscriptions or services.
In close collaboration with several customer service departments, we have identified early signs of churn. Based on these insights, we have created a guideline of what you should keep in mind if you want to proactively handle churn.
Data shows that 25-30% customers who consider canceling their subscription have contacted at least one department 2-4 times before they churn.
To give an example, those who cancel due to finding better alternatives or switching providers have typically called the technical department prior to the cancelation. You can use this knowledge to share information between your technical support and customer service departments.
This way, you can ensure that your customer service agents can send a follow-up email to any relevant customers to check whether they still need assistance.
Customers who express frustration or only mention few positive words during a conversation are more likely to cancel their subscription.
Luckily, data shows that your choice of words can affect customer satisfaction positively. In fact, the number of positive words from customers double when employees have a high sentiment score. Also, showing empathy can raise customer satisfaction levels by as much as 15%.
Even though a high sentiment score in itself cannot prevent churn, it can contribute to strengthen customer experiences and relationships. Also, a friendly approach can help ensure that customers speak positively about your product or service levels to their friends, family, and acquaintances.
Proactively preventing churn is not only about helping customers via phone, chat, or email – it also regards preventing customers from contacting your customer center in the first place.
Because in every conversation, you get valuable insights into your customers' needs, wishes, and attitudes. This provides you with a significant advantage in choosing the correct win-back strategies, developing new strategies, and suggesting price or product adjustments.
For instance, customers mention billing in approx. 9% of all Scandinavian conversations, which often leads to frustration. A proactive way to prevent such calls would be to continuously send updates to your financial department about which areas customers have difficulties understanding and update billing and FAQ pages accordingly.
In addition, your customers give you a clear indication of how they experience your brand, product, or service levels in comparison to similar brands. This knowledge can be used to improve and adjust your positioning, so it fits customer expectations.
The most effective way to prevent churn is to use data to identify patterns hidden in cancelation conversations, leading to answers tailored to your business. Once you have identified these patterns, you can formulate strategies on how to proactively retain customers. Common for any proactive retention strategy is that you should set alerts for conversation in which customers have expressed a particularly high level of frustration or who have mentioned competing brands. You can then follow up to see if the given customer has received the help they need or if they require further assistance.
