How To Identify At-Risk Customers & Prevent Churn?
How to prevent churn by identifying at-risk customers?
In SaaS, you can grow your revenue only if your churn rate is low, so retaining at-risk customers is crucial.
In this article, we will discuss the ins and outs of at-risk customers, how to detect them, and five actionable strategies to help you prevent churn. Let’s dive in!
- At-risk customers are those who are showing signs of canceling their subscriptions.
- Identifying at-risk customers is crucial for understanding their behavior, improving customer satisfaction, and reducing churn rate.
- The main factors contributing to at-risk customers include poor onboarding process, lack of product value perception, lousy customer support, unfixed bugs, and no learning materials, resource center, and FAQs.
- You can detect at-risk customers by tracking in-app feature usage, sending NPS surveys with follow-up questions, using NPS response tagging, going through customer support tickets, doing social listening, and monitoring reviews across different platforms.
- To retain more at-risk customers, you can try actionable strategies, such as optimizing your onboarding process, reducing the time-to-value, doing customer segmentation, following up with at-risk customers, sending in-app renewal reminder notifications, and providing self-serve support 24/7 through an in-app resource center.
What are at-risk customers?
At-risk customers are users who have subscribed to your products or services and are showing signs that they may leave and cancel their subscriptions. As a result, at-risk customers end up increasing the churn rate.
Why should you identify at-risk customers?
Identifying at-risk customers is crucial for retaining existing customers and growing your SaaS revenue.
Let’s see why you should identify at-risk customers and how you will get the upper hand in retaining more customers.
Understand at-risk customers and the reasons for their behavior
Understanding at-risk customers and the reasons for their behavior helps you determine what recurring issues and patterns have led to this unwanted stage.
While identifying high-risk customers, you can address the root causes and focus on working to retain those customers.
Especially when the issues are repeated, this indicates that there is a major drawback that needs to be fixed.
Improve customer satisfaction and level up customer success
While addressing and identifying the concerns and wants of an at-risk customer, you learn what your products lack and what you should do to improve the customer journey.
It makes identifying at-risk customers an excellent opportunity to solve your product’s issues and boost customer satisfaction.
You can also improve customer success by finding issues as you identify customers who may churn. When your customers are happy and satisfied, you can see a noticeable positive impact on overall customer success.
If a customer has a smooth experience and meets the goal with few or no issues, they will consider the product successful.
Prevent customer churn and drive customer loyalty
Analyzing customer churn data helps you predict churn and identify friction points. You can remove them to enhance the customer experience and reduce the average churn rate. When you proactively fix the issues, customers feel that they are taken seriously which increases customer loyalty.
Customers will likely continue using your products and recommend them to others when satisfied which can lead to long-term growth for your SaaS.
Why do some customers become at-risk of churning?
The first step in preventing churn and improving customer retention is determining the factors contributing to at-risk clients.
There are a lot of factors that contribute to creating at-risk customers. Here are one of the most common ones:
- Poor Onboarding: A poor onboarding process can make customers struggle due to a lack of support or guidelines. After it, customers will undoubtedly become frustrated and not use it anymore.
- Lack of product value perception: Customers will feel they are not getting a good return on investment if they cannot see value in your products. By not meeting customer expectations, you can also lose potential ones through negative feedback.
- Bad customer support: Poor customer support leaves customers without help or thinking their complaints are not taken seriously. This bad experience can make them frustrated or feel disrespected, and consider stopping using the product.
- Unfixed bugs: Bugs prevent customers from using the products as intended. And if bugs remain unfixed, customers will feel you are unresponsive or don’t care enough about the user experience. Then they will be more inclined to leave the products.
- No learning materials, resource center, or FAQs: Customers cannot effectively use a product without learning materials, resource center, or FAQs. Without proper in-app guidance, they cannot troubleshoot issues. This problem can frustrate customers and lead them to consider leaving the product.
How to monitor customer behavior and detect at-risk customers
Monitoring customer behavior and detecting at-risk customers play a crucial role in how well you can retain at-risk customers.
Let’s see how you can monitor customer behavior and identify at-risk customers.
Track in-app feature usage and see how customers interact with your product
Tracking in-app feature usage and what customers are doing in the app helps you understand why some customers are at high risk of churning. While doing so, you can identify your customers’ most used or underutilized features and spot friction points.
If you monitor customer behavior on an ongoing basis, you will know what to focus on and develop a plan to retain at-risk customers before it’s too late.
Send NPS surveys to gauge user sentiment and identify detractors
NPS (Net Promoter Score) surveys effectively measure customer loyalty and collect user sentiment through feedback about the customer experience. You can send NPS surveys to identify detractors. These are customers who are at high risk of churning.
Make sure to add a qualitative follow-up question to understand the reasons behind low scores from detractors. With it, you can uncover the necessary insights to improve customer satisfaction.
Use NPS response tagging to categorize feedback and identify patterns
In addition to collecting NPS scores, you can use NPS response tagging to identify trends and patterns among scores. Simply set up tags and group customer feedback responses by themes to easily see recurring themes in both detractors’ and promoters’ feedback.
By looking into the responses of detractors, you can understand the most common problems for survey respondents and prioritize resolving them. It can help you improve the customer experience and retain more detractors.
Dive deep into customer support tickets and find trends
Besides the customer feedback you get through NPS surveys, follow-up questions, and other ways, you can gather invaluable insights from your received customer support tickets. Try to understand what problems your customers mention in support tickets more often.
You can find trends in the customer support tickets if most of them report the same problems or are confused about how your product works.
These trends can help you identify at-risk customers’ causes and you need to take immediate action.
Do social listening and monitor reviews across different platforms
You should monitor relevant conversations, brand mentions, and comments on social media platforms to understand how your customers feel about your product or service. It helps you get a sense of sentiment around the brand and identify potential issues that could create at-risk customers.
In addition, you can keep an eye on the reviews on product listing sites, such as G2, Capterra, etc., to get valuable insights into customer experiences with your products.
You must constantly respond to negative feedback to show you care about all your customers and are willing to work on the problems.
Here is an example of how to handle negative feedback properly.
5 actionable strategies to save at-risk customers and increase retention
You can implement various strategies to save at-risk customers and increase the retention rate.
Let’s go through the 5 most actionable strategies.
Optimize your onboarding process and reduce the time-to-value
You should optimize your onboarding process to ensure a fast time-to-value for your customers and convince them to continue using it.
A good strategy is to create interactive walkthroughs with a wide range of UI patterns, such as tooltips, driven actions, and modals, to guide your customers in using your product’s key features.
Besides using interactive walkthroughs for improving onboarding, you can make your onboarding process more personalized and contextual by highlighting more relevant features to your customers’ use cases.
For example, you can use a welcome screen, like Kontentino did, to capture important customer data and create personalized onboarding flows for each customer using that data.
In this way, you can personalize the onboarding process based on specific use cases and reduce the time-to-value. By doing so, you’ll minimize the chance of customers’ inactivity after trying the software and reduce the possibility of being an at-risk customer.
Segment customers based on behavior and trigger personalized re-engagement flows
You can segment your customers based on feature usage and behavior (such as inactive customers, power users, etc.) Then you can personalize their in-app flows to retain more at-risk customers.
Triggering personalized re-engagement flows when at-risk behavior is detected, helps you create more targeted campaigns to effectively get customers who are at-risk back on board.
Follow up with at-risk customers and try to fix the issues to prevent churn
You can prevent at-risk customers from churning by following up with them and trying to fix their issues. Reach out to them via email to know more about their issues. Try to set up a quick call to clarify everything.
Listening to and understanding the problems faced by detractors can help you take action to solve the issues and find areas to improve. It will also make customers feel heard and valued, preventing them from churning.
Send in-app notifications to remind customers of renewal time
Sending in-app notifications to remind customers of renewal time can help avoid involuntary churn. It occurs when customers fail to make a payment for reasons such as outdated information, incorrect billing addresses, insufficient funds, or other factors beyond the company’s control.
In addition, don’t forget to highlight your product’s value one more time so customers will know what they miss out on if they don’t renew their subscription. This in-app communication technique can help you retain more customers.
Invest in an in-app resource center to provide self-serve support 24/7
You can try creating an easily accessible in-app resource center (aka help center) for your customers. It will enable self-serve support allowing users to access it whenever needed so they don’t have to wait for a customer support agent whenever there is an issue.
You can link all your support files in one place to the knowledge base, such as documentation, FAQs, webinars, tutorials, and live chat widgets, so customers can then easily find your resources on the website. If you have extensive help and documentation sections, you will have fewer customers who can’t figure out the problems on their own.
Bringing in new customers can be useless if you cannot retain them. You should take measures to uncover at-risk customers and find ways to enhance the customer journey and reduce churn.
You can use the ways and strategies mentioned in this article to identify, monitor, and retain customers to ensure constant revenue growth for your business.
Want to identify and retain your at-risk customers? Book a demo call with our team and get started!