If you don’t document your churn, you’re not learning from it
There can be a million reasons for churn. Many of them can be fixed by the Customer Success department. Some can’t.
Most of the potential churn reasons should be detected (and addressed) during onboarding. But sometimes, churn can’t be avoided.
It’s crucial that we learn from churn. One thing I recommend to every Customer Success team is to share the cancellation emails with the rest of the organization – either in a Slack channel or just via email. This first-hand, unfiltered experience gives a good insight into why our customers are leaving us.
But this is qualitative. You need to add the quantifiable side to it. And that’s why today I want to share what I have learned is important in documenting churn in your CRM so that you can actually learn from it.
1. Separate LOST and CHURN reasons
Most CRMs have a closed/lost reason field. And in most CRMs that I see, this reason is only half-heartedly filled out… But closed/lost reason and churn reason are NOT the same. So do yourself a favor and separate them.
2. Be SPECIFIC
“Didn’t get value” is NOT a specific reason for churn. There are probably a lot of reasons specific to your business case. More general ones are budget cuts, lost to competitors, not enough usage, or no ROI seen. The important part is that you define terms that are actually useful. I also advise to add a comment field to go into more detail about the specific churn. Believe me: Otherwise it WILL get lost.
3. Pre-define a small set of reasons
Don’t make the churn reason an open text field. Instead, pick 4-6 common reasons (and allow for an “other” option). This might sound hard, but it will make analyzing and talking about it much easier later.
4. Make filling out the form part of your offboarding playbook
Do you have an offboarding playbook? I hope so! The biggest failure that this approach usually brings with it is…. not filling it out. So make sure that this is a mandatory part of any customer offboarding process.
5. Install a monthly “churn session” with marketing and sales
This doesn’t have to be an in-person meeting, but you’ll want to share the churn highlights to learn from every month (depending on the volume of customers). Share the percentages of churn reasons, some qualitative learnings, and especially what marketing and sales can improve to reduce those reasons in the future.