Growth May 26, 2020

Tip: If you can't get a handle on your churn, temporarily require manual cancelations

Growth Bites @growthbites

If your customers are leaving and you can't understand why, there's still hope. In times of urgency, consider replacing your in-app cancelation flow with manual cancelation until your retention improves.

You might be wondering why this Growth Bite contradicts yesterday's. After all, manual cancelation undermines user experience, right? Well, when Josh Pigford of Baremetrics was battling a 13% churn rate and couldn't get enough actionable feedback despite surveying customers in his cancelation flow, he turned to drastic measures. He removed his in-app cancelation but, importantly, still made it incredibly easy to cancel manually by offering multiple channels (live chat, in-app messaging, email, twitter, phone) and responding quickly. Suddenly, his team was able to get tons of great feedback while preventing roughly 15% of cancelations. In fact, he says this saved his business. He held the course until he'd gotten enough feedback to cut his churn in half (2 years), and then finally allowed in-app cancelations again.

Beware: This is a Hail Mary which could negatively impact relationships, so use it with caution and only when you’re out of options (if at all).

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  1. 2

    Completely disagree with this and I think it's arrogant to believe your customers "owe you" feedback before you release their credit card from being held hostage.

    Do not do this. This is like holding a gun to someone's head and asking them if they like your landing page.

  2. 2

    I’m not sure how I feel about this. As a user, I would definitely not sign up if I knew I would need to talk to someone and have to justify why I want to cancel.

    1. 1

      Yeah, this one's not for the faint of heart! It can be powerful, but only in specific situations and as a last resort — and even then, you've got to be careful.

      It shouldn't have a big impact on signups, but it can definitely have a negative effect on customer relationships.

  3. 1

    I understand the motivation, but I see too many negatives with this. Word will spread and could possibly remain a defining aspect of your service on the internet long after you have reactivated the automated cancelling option which could drive away future customers.

    If you have confidence in your service, I would focus more on getting solid feedback from departing customers when they cancel with the idea I can win them back later or use the information they provide to improve things to help retain more customers in the future.

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