Rethink Commerce Blog

Tested Strategies to Reduce Involuntary Churn and Increase Customer Retention

Posted on August 24th, 2016 by

Bringing leads into your sales funnel and converting them to loyal customers and brand advocates is a process involving significant planning. However, even after a lead has become a loyal customer, the work is still not over. The focus then shifts to customer retention and enacting strategies to minimize both voluntary and involuntary churn. Proper strategies and communication are essential for reducing voluntary churn, but involuntary churn is most often caused by the improper tools.

Focusing on Involuntary Churn

While many SaaS marketers understand the techniques necessary to reduce voluntary churn, preventing involuntary churn can be much more enigmatic, because it is often caused by technical glitches many SaaS marketing teams have not considered or tested . The events that cause involuntary churn—such as payment processing issues or loss of contact information—are addressed by standard tactics focused on the pain points of involuntary churn.

Tested Tactics

  • Failover Processors
    No matter which system you use to host your SaaS platform (public or private cloud, internal servers), you need to make certain that you have systems in place to divert services to other backup processors in the case of a system failure. This will reduce the risk of service outages for your customers.
  • Use Account Updaters
    From enterprise-level solutions like Visa’s Account Updater to those focused on SMBs, an automatic account updating solution will give you the information necessary to ensure that your customers do not drop your product simply because they switched cards or are approaching their credit card’s expiration date.
  • Use Dunning Techniques for Declined Cards
    A dunning technique is the system you use to increase communication with a customer regarding debts or obligations. For software companies wanting to reduce involuntary churn due to declined cards, proper dunning is a form of customer service. This customer service mindset gives customers automated notifications that a card failed to process, asking for an updated card, or giving additional options for downgrading or putting an account on hold.
  • Create a Retry Logic Strategy
    What is the strategy for retrying recurring order processing? In order to reduce involuntary churn, businesses need to enact an automated system that processes through the moments when customers are lost because of technicalities, and retries the event so that they have an opportunity to make a choice.
  • Use Dunning Techniques to Follow-up With Customers
    Customers may slip through your businesses hands for many reasons: inability to pay, technical failure on your end, forgotten authorization for recurring orders, etc. A good dunning technique for following up with customers sets up a communication plan where customers are contacted during the process of any cancellation and after any automatic cancellation due to payment or order processing.
  • Integrate Automated Communication to Prevent Cancellation
    Integrated communication works to reduce both voluntary and involuntary churn, as customers are given options to deal with a situation that is causing the problem. Automating dunning systems, retry logic, and customer service follow-up serves to ensure that customers do not accidentally cancel an account.

Customer-Service Mindset

The best way to reduce churn of any type is to focus on creating great customer service success . When implementing these or any other software solutions for reducing involuntary churn, great companies approach it with the attitude of systematic customer service. Customers are given the tools necessary to ensure that they get the product they want and expect.

Use these systems to provide automatic customer service responses and reduce your software downtime. This will reduce involuntary churn, increase your customer retention rates, and improve the satisfaction of both new and existing users of your software.

Does your company use any of these tested strategies to increase customer retention? Leave a comment and let us know how they work for you.

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Adriana Iordan

Sr. Director, Product Management

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