Customer churn refers to the customers that stop using your products or services. For SaaS firms, client churn is a result of customers canceling or not renewing their subscription.

Measuring customer churn allows you to understand how effective your business is at retaining clients, and a low-pitched client churn rate is vital for business growth.

In this article, we take a look at evaluating your churn rate, why patrons churn, and how you can use behavior-based, personalized email and push notifications to drive engagement and reduce client churn.

Measuring customer churn Why is it important to calculate customer churn rate ? What is an acceptable churn rate ?

Understanding why your clients churn Reducing short-term customer churn with data-driven messaging Behavioral onboarding emails

Reducing long-term customer churn with data-driven messaging Product update emails Personalized Insights emails

Measuring patron churn

Customer churn rate can be calculated in several different ways, and each metric is useful for different purposes and types of businesses. The most straightforward measure of customer churn rate is the percentage of patrons that stopped paying for your product during a specific period.

SaaS and subscription firms that cost monthly track churn rate by monthly cohort, as well as annually, so they can see how this rate changes over time.

Why is it important to calculate customer churn rate?

Customer churn rate is one of the most important metrics for a clearer understanding of the health and long-term future of a business.

The more customers that churn, the more you need to acquire to maintain your revenue or develop at the same rate. Since the cost of attracting new clients can be significantly higher than the cost of retaining patrons, high-pitched churn rates can quickly impede revenue growth.

Measuring and tracking customer churn rate is therefore vital for financial simulate, prioritizing product growing, and customer success struggles. It enables businesses to understand whether client retention has improved on a month-to-month or annual basis, and what may have affected it.

What is an acceptable churn rate?

Churn rates always vary by industry. The maximum viable churn for a company depends on the company’s runway and the rate at which it can grow existing accounts through up-sell and cross-sell.

Tech industry investor, Andrew Chen advises that in general “it’s critical to get monthly churn under 5% and the goal should be 1-2% ”.

Understanding why your customers churn

It can be useful to measure and analyze churn for different client tenures, as the reasons long-term patrons churn are often different are comparable to newer customers.

Short-term customer churn

SaaS businesses generally find a higher customer churn rate in the initial few months of the customer lifecycle due to clients still learning and evaluating the product, but not reaching the’ aha moment‘.

Long-term customer churn

Reasons for long-term churn may include customers experiencing flaws or issues with the product, lack of visible product growth, and poor customer service.

Measuring both short-term and long-term churn rates helps you to more easily identify and address the causes, and asses the impact of your solutions.

Reduce short-term customer churn with data-driven messaging

Short-term churn is typically due to users not reaching the’ aha moment’- the level at which they recognise the appreciate in your product. While it is called a’ moment’, it is typically a set of actions that separate customers who you are likely to stick around from those who will churn.

Every product has a unique’ aha moment’.

For Facebook, the aha moment is when a new customer connects with 7 friends in 10 days. For Slack, it’s when 2, 000 messages are sent between a squad.

Facebook and Slack have simplified their’ aha moment’, but for many products, the’ aha moment’ is reached when a new customer accomplishes several actions.

Investor and former Growth Product Manager at Snap Inc ., Parsa Saljoughian supports a helpful guide on how to discover your app’s aha moment.

Once you’ve identified your product’s’ aha moment’ you can map out ways to help customers reach it. Email and push notifications are two of the most effective canals for driving product involvement and helping clients reach the’ aha moment’.

Behavioral onboarding emails

Understanding and tracking customer interaction with your product is key to ensuring you can deliver relevant onboarding email and push messages that prompting action. For example, a client who logged in but didn’t interact with your product will be needed different messaging to a customer who successfully engaged with two key features and invited a friend/ colleague to use it too.

Dropbox’s email supplies a great example of how you can prompt users towards an action- and get them closer to their’ aha moment’. It focuses on a clear benefit and makes it quick and simple to achieve.

dropbox onboarding email reduce customer churn

Invision send a similar email 😛 TAGEND

Invision email example

Emails like this can be set up in a messaging workflow and triggered based on the customer’s behavior. For example 😛 TAGEND Trigger workflow when the customer makes an account Wait one day Send email 1 if the customer has not’ established a board’ Send email 2 if the customer has’ established a board’

Once customers have started involving with your product, you can use email and push contents to remind customers to finish incomplete tasks that will bring them closer to the’ aha moment’.

“The best apps will be the ones you don’t have to remember to use. They’ll remind you. Soon that will be the only type of app.”- Noah Weiss, Slack( First Round interview)

If you be understood that a brand-new client is heavily involved with your product in their first days or weeks and has reached the’ aha moment’, you can create a condition in your workflow to stop transmit them onboarding emails entirely. Instead, you could send an email or content offering a discount on an annual program( for example ).

Reducing long-term client churn

Long-term churn is typically due to clients no longer experiencing enough value from a product( except for unavoidable churn, i.e. a customer that terminates their business ). Product updates and personalized revelations are two types of emails that can help customers experience value and promote continuous product engagement.

Product update emails

New features and updates can significantly increase the value that customers receive from your product so it’s important to communicate them effectively.

Starling Bank, Asana, and Notion offer great examples of product update emails that explain the benefits of the brand-new features, civilize customers on how to use them and prompt engagement with the product.

Starling bank email instance 😛 TAGEND

Starling bank product update mobile app reduce churn

Asana email lesson 😛 TAGEND

Asana product update reduce customer churn

Notion email instance 😛 TAGEND

Notion product update reduce churn

Regular product update emails prove momentum in product evolution so customers trust the product will continue to meet their needs in the future.

Collecting customer information and tracking event data will enable you to segment your patrons and ensure you simply send product update emails to those for whom it is relevant.

Data-driven personalized revelation emails

Customer account usage revelations can deliver additional importance and encourage continuous product engagement.

Small business accounting app FreeAgent sends a weekly summary email to stimulate customers to take specific actions, based on their account usage. This email acts as an extension of their core product by helping their clients stay on top of their investments. It prompts activities and habits as a behavior to continuously deliver customer value.

FreeAgent weekly summary email example

Strava sends a similar email- their monthly stats update delivers customers personalized revelations based on their account usage and inspires engagement with the product.

strava stats email example reduce customer churn Image source: Dribble- Monthly Stats email by Strava

You can create personalized revelation contents, like FreeAgent and Strava, by adding dynamic content to your emails. Vero supports the Liquid templating language to allow you to create personalized content, and it’s Fusion feature enables you to pull data directly from your API into Vero at the time the email is being made, just before it transmits. This helps you create emails with report utilization data, personalized product recommendations, and more.

Measuring the impact of your messages on patron churn

Measuring the direct wallop of campaigns on customer churn rate is notoriously difficult due to the required time period for testing, and ensuring that no other factors influence customer retention during that interval. You can, nonetheless, more easily and accurately A/ B experiment email and push campaigns to see the impact on customers’ feature usage and engagement.

We’ll be adding more on how to accurately test the impact of email and push campaigns on key proliferation metrics- stay tuned!

For now, we hope this article invigorates you to create messaging that helps your patrons get to the’ aha moment’ faster, and deliver personalized emails that offering more value and motivate regular product engagement.

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