This article was transcribed from Sylvia Yin’s presentation during March 2022’s Customer Success Festival APAC: Reloaded.



In this article, I'm going to walk you through how to decode customer churn.

Before I delve into the crux of the matter, allow me a moment to set the stage for our topic. Then, I'll give a quick background, so you understand where my experience comes from. Finally, I’ll share what I've learned about managing churn as it happens.

It’s not me, it’s you

 Cancellation of subscription

Back in 2018, I received an email from a customer requesting to churn. You’ve probably received similar breakup emails from your customers – they’re pretty common. If you're lucky, your customer will take a moment to explain what they're thinking, but often, this may be all you get – a couple of lines.

Your customers are busy and they don't always have time to explain in detail why they decided to pause or stop the subscription. And if your customers are culturally Asian, you may find that the email is less direct and confrontational; in that situation, you may never get to understand your customer’s thinking and the real reason why they have decided to churn.

When you peel away all the layers of the onion, the majority of the time, the lack of value experienced is the root cause of churn. However, depending on what your customer is saying to you, there are tactical actions that you can take to deliver the value right now or to buy time so that you have the opportunity to deliver value before they’re gone for good.

This matters because churn compounds. We know that in the recurring revenue business model, churn gets worse as your customer base grows. It's much harder to patch a leaky bucket of churn with new sales than it is to retain customers, so it's important to pay attention when our customers leave.

We must remember that churn in itself is not a problem, but it's a signal. And when the signal is flashing, what do you do? You don't ignore it because it’s telling you that there's an action that you need to take. Focusing on actions that you can take when the signal is flashing red will help you move forward.