The Silent Killer of Product Management: Customer Churn
As a product manager, there’s no worse feeling than investing months into acquiring, engaging, and converting users, only to see them disappear at the very end. Customer churn is a silent killer that can quickly erode your user base and revenue. In this article, we’ll explore the most impactful strategies to mitigate customer churn and what to do after the user has already churned.
Understanding the Types of Churn
Before we dive into strategies, it’s essential to understand the different types of churn. There are three main types:
- Voluntary Satisfied Churn: This occurs when users consciously decide to disengage because they no longer need your product, even though it satisfies their needs. An example might be an exam preparation app after the exam season.
- Voluntary Unsatisfied Churn: This happens when users disengage because your product doesn’t meet their needs. It might be due to a lack of features or targeting the wrong user segment.
- Involuntary Churn: This occurs when users unintentionally disengage with your product, often due to technical issues like payment or login problems.
Pre-Churn Strategies
While it’s possible to deal with churn after the fact, it’s more effective to prevent it from happening in the first place. Here are some strategies to help mitigate the risk of churn:
- Habit Reinforcement: Track your users’ engagement levels and implement strategies to re-engage users who drop off before a specific risk threshold. This might include temporary increases in push notifications or special campaigns and promotions.
- Outcome Boost: Artificially boost outcomes for users who aren’t reaching their goals. This will help reinforce the potential value of your product in their minds.
- Cancellation Flows: Implement a well-thought-out cancellation flow to change users’ minds. This might include increasing the perceived value of staying, incentivizing users to stay, or proposing alternative use cases.
- Limit Payment Issues: Optimize your payment processes to reduce the risk of involuntary churn. This includes rotating card processors, reducing restrictions, and optimizing fraud classification.
Post-Churn Strategies
Even after users churn, you still have a chance to retain them. Here are some strategies to consider:
- Reactivation: Bring users back to the same use case they churned from. This targets voluntary unsatisfied churn and requires a stronger incentive, such as free credits or vouchers.
- Resurrection to a New Use Case: Introduce users to a new use case, especially for satisfied voluntary churn. Timing is critical, so target users during periods when they’re most likely to need the new use case.
Closing Thoughts
Customer churn is a natural part of every product, but you can reduce it by preventing users from churning in the first place, reactivating churned customers, and resurrecting them to a new use case. Don’t just implement various churn-related tactics; take a step back and determine the type of churn you’re experiencing. Focus on understanding your users, collecting appropriate data, and implementing specific strategies to tackle the root causes of churn.