Much of what we do at Eigenworks is aimed at helping companies retain customers. We seek to understand why customers leave or churn, and identify strategies that can help retain more of them in the future.
When it comes to combating customer churn, the cold hard truth is you can slow it down, you can limit its scale, you can sometimes even reverse it (saved accounts) – but you can never prevent it entirely, especially if your product has a limited lifespan. When the day comes when your customer no longer needs your product, you need to make a choice. You need to consider just how much effort you are willing to put into keeping them as a customer, and decide if it is worth the effort.
Understanding Your Buyers
You cannot draw any conclusions about your buyers until you understand them. Its more than just understanding what they are as a company – just knowing that your buyer sells software isnt going to cut it. You need to know how your product intersects with their business – when in the development cycle does your product come in: daily, weekly, or at set times in the dev cycle? Who uses your product at their company – software engineers? Admin assistants? Accountants? Everyone?
Some of these questions will be easier to answer than others, but you cant begin to understand why a company might stop using your product until you comprehend how they used it to begin with, and the primary need your product addressed.
Know When To Fold Em
How far you should go when retaining a customer? Not far that you are giving more than youre getting in return. Buyers seek-out products because they have a problem or problems that need solving – what we call the fundamental change. They bought your product because they saw it as a solution to their problem – as a sale that was a win for you, but it also the seed of a future loss. Its the nature of the beast – a problem that is solved doesnt need to be solved again. This is most obvious with limited use-case software – if your buyer has an archive of old video formats that needed conversion, your product lost its utility the moment they finished converting everything – but it isnt limited to such scenarios. Your software may have filled a need until they learned how to build an in-house solution to do what your software does themselves.
If their problem is solved, you may have done all you can for them – insisting on hanging around will overstay your welcome. Sending your sales team back to the table to pitch new and improved features may only serve to irritate your buyer. They dont need you anymore, and constantly trying to repeat your sale is just going to come off as needy.
The Art of Listening
The best way to approach unavoidable churn is to see it coming – to not be blindsided when a buyer doesnt renew, to not panic or get angry because you were surprised. Understanding the buyer helps, and so too does being proactive about regular communication. Talk to your buyer. Talk to them often. Involve yourself in who they are – if you make yourself a partner in their endeavor, youll know only where your buyer is, but where they are going. Youll be able to see future – including a time when you are no longer a part of their business. Plot your course accordingly – is there a way your company can meaningfully be a partner in that future, or is that wishful thinking? Are there other areas in the customers business that can use the same solution youve provided here, or other opportunities for products you sell?
Dont keep this to yourself. When you talk to your buyer, talk about your relationship with them. Dont let the future sneak up on you.
Accepting Unavoidable Churn
Keeping informed of your clients needs is a key function of customer success. Now that you know that some churn is inescapable, it is time to review the information pipeline that goes from your buyer to you. Are you fully communicating? Are you talking about the future? Do you know if a client has gotten all they can from your product – is this information you know in advance, or are only learning at contract renewal? If its the later, why? Maybe its time to reorganize the way you are kept informed of buyer insights by your teams.
You might also help those teams out by listing examples of scenarios and indicators of where the customers needs have changed, and that the account might be at risk. Stakeholder changes, new leadership teams, budget renewal, falling usage. Get an understanding of how your buyer is engaging with their product – passively, letting your product do all the work, or actively, using you product as a learning tool to do it themselves.
No matter what you do, dont forget that unavoidable churn is not a slight against your product or your company. No partnership lasts forever, and endings are not necessarily a bad thing. A buyer who had good experience with you both before and after churn is on wholl remember you fondly – they may not ever need your product again, but theyll tell others how good the experience was, from the first day they on boarded your product to the day their usage ended. Thats a reputation worth having.