5 Reasons Customers Churn (and How to Avoid It)

Spencer Davison
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October 25, 2022
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5 minutes

One of the best parts about being a B2B customer success professional is building relationships with people and supporting customers in pursuit of their goals. More often than not, these people are counting on your product to solve a major problem that is holding their business back, which makes it especially rewarding to help them achieve their key objectives. Human connection is essential in the customer success world, because at the end of the day, the job title says it all—they just want their customers to be successful.

However, one of the toughest parts of working in the CS field is dealing with churn. Sometimes, churn can leave you and your team with more questions than answers, and it’s up to you to pick up the pieces and draw conclusions on what went wrong. Churn is especially difficult to stomach during times of recession or economic uncertainty when retention is vital. That’s why it’s crucial to recognize the warning signs of churn and know how to proactively fix it.

Of course, there are a slew of reasons why a customer might leave, and sometimes it has nothing to do with you or your product. But by recognizing the red flags below, establishing a human connection, and building clear paths toward resolution, your team can more effectively learn from churn and prevent it in the future.

Misalignment on goals and expectations

The reasons for churn are usually multifaceted, but one common reason for churn is misalignment. This type of confusion can happen even before a customer purchases your product. In the pre-sales portion of the customer journey (such as the discovery and demo stages), your team needs to become aware of your customer’s specific goals, needs, and expectations. This is the only way to clearly understand and communicate how your product is uniquely positioned to help them get there.

As you move through the customer journey, be sure to reiterate the customer’s goals that they specified in the pre-sales process to make sure they’re still accurate. Sometimes plans change, and in order to retain a customer, you need to be in the loop so you can iterate. Consider involving other key stakeholders from your customer’s team whenever possible to make sure everyone is on the same page, and make sure any resources and data are sharable. 

Lack of personalization

Every customer is different, and every customer expects to receive high-quality touchpoints from a company they’re invested in. So if you want your product to remain competitive, you can’t afford to take a one-size-fits-all approach when building out solutions, timelines, communications, and presentations for your customers. It’s your job to get to know your customers’ businesses, unique pain points, and ideal end states so you can develop custom-tailored success plans accordingly. B2B companies that fail to personalize experiences can leave their customers feeling lost, undervalued, and misunderstood.

Customers who trust your business and connect with your team are far more likely to stick with you, which is why CSMs need to personalize interactions wherever possible. By connecting on a personal and professional level and showing your customers you know what means the most to them, you can build the trust and credibility needed to keep them on board. Take the time to personalize presentations, roadmaps, emails, etc. This attention to detail can go a long way.

Gaps in feedback loops

It’s not just the CSM’s responsibility to avoid churn. It takes a village to keep customers coming back year after year. Customer retention requires synergy and cooperation between the customer, CS team, product team, sales team, and executives. Knowing this, your team needs to have a feedback loop established so you can proactively respond to the voice of the customer.

At the end of the day, the voice of the customer needs to be heard throughout the organization. Occasional one-on-one meetings with CSMs aren’t enough to make a customer feel valued. Customers who don’t feel important or that their needs are not being heard are more likely to take their business elsewhere. To prevent gaps in your feedback loop, follow these best practices:

  • Connect with your customers early and often.
  • Use data to define warning signs of churn.
  • Promptly deliver any warning signs or direct feedback to key collaborators, such as product, sales, and executive teams.
  • Work cross-departmentally to develop an action plan to fix any issues (ideally, before they start).
  • Keep customers informed on any new developments or data.
  • Track any churn trends for future reference. 

With a strong feedback loop in place, your team can work toward increasing retention rates and building trust with customers. 

Lack of support

It happens all too often—a customer signs on to a new product or service and receives little to no support after onboarding. A customer who doesn’t have support won’t ever experience the full value of your product, and we all know what happens next. This is why you need to establish a personal relationship with each customer from start to finish. 

From the very beginning, CSMs should have an engagement roadmap they follow throughout the customer journey. By staying connected with each customer on a regular basis and personalizing communication with them, you can more effectively provide the support they need. Here’s an example of a path you may follow throughout the post-sale customer journey:

  • Onboarding phase: Work with the customer to establish goals, objectives, and expectations with your product. Provide clear action steps and show the customer how to use your product, and make sure they have at-a-glance resources along the way. 
  • Adoption phase: Share customized implementation support and guidance. Provide insights on usage data and share recommendations to increase feature and user adoption.
  • Renewal phase: It should be easy for your customers to renew their contract, and it should be even easier for them to make the decision to do so. Give them the data points they care most about, show them the ROI of your product, and make sure they have access to the right people.
  • Expansion phase: Again, it should be an easy decision for your customers to add on additional services. Play the role of subject matter expert and use benchmarking data to show your customers what other companies are able to accomplish with your product. Then, connect the dots by explaining how they can achieve similar results. Give them the support they need to choose which option is right for them, and be prepared to justify the value of upsell with concrete data.

Some factors that contribute to churn are out of our hands as CSMs, but what we do have control over is how much support we provide to our customers. If you want to keep churn rates down, every customer needs a positive experience, and it’s up to you to make sure they receive the white-glove treatment.

Inability to prove product value

Of all of the reasons for churn listed in this blog, this one may be the most crucial to avoid. Even if everything else is on point—your feedback loops, your customer support, your alignment, your personalization—inability to prove product value can wreck the entire customer experience.

Customers need to know that your product is and will continue to be worth their time and money. Even if your product has changed their processes entirely, it means nothing if they can’t tangibly see how and why. This is why you need to be sharing digestible data-driven content with your customers throughout the customer journey, not only at renewal time. Data-driven content is what will set your product apart from the competition, and doing so can be the difference between retention and churn. Here are some examples of data you should be sharing with customers: 

  • Usage reports
  • Goal progression and organizational alignment 
  • Benchmarking data / competitive comparisons
  • ROI and future value projecting

Develop a plan for delivering this data at the right times in the customer journey. This will help your CS team stay proactive rather than reactive when it comes to customer retention. 

It can be challenging to fully grasp why customers churn, but there are some tweaks you can make right away to prevent it from happening in the future. By personalizing content, aligning on goals, providing strategic support, and proving product value, your team can boost retention rates and keep customers happier in the long run.

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