Article by Gill Lambert
2nd May 2019
How to keep churn management at the top of the marketing agenda
Churn rate is a vital metric for every recurring revenue-based business, and most of us are familiar with the common causes of revenue leakage.
What is surprising however is how regularly those new marketing initiatives get prioritised over activities that will optimise customer lifetime value and reduce customer churn.
Common revenue leakage points:
- Manual renewal
- Auto renewal/voluntary cancellation
- Auto renewal/involuntary payment failure
- Mid-term cancellation
Putting a Voice of the Customer (VOC) programme at the centre of your subscription or membership management process is a great way of keeping those CX issues that impact on churn, at the front and centre of your business.
Implemented correctly, a VOC programme will help you to systematically engage with customers, fix problems, gain insights into their needs and expectations and win their loyalty.
An effective programme will reach marketing and front-line staff as well as each customer type. It will consistently ask the right person, the right questions, at the right time.
Without these disciplines in place, these incremental, CX improvement activities can easily get pushed to one side, particularly if resource is stretched or deadlines are tight.
Businesses that have a mix of off-line and on-line customers, or who outsource some or all the customer management process can often be daunted by the perceived complexity of managing a VOC programme, but arguably the need is greater if there is a lack of transparency in the business process.
Most VOC programmes include these seven key steps:
- Identify your business goals
- Define the KPIs that will track performance
- Select the customer groups and/or personas to target
- Identify and understand customer touchpoints
- Plan engagement activity and collect feedback
- Identify any reports from your bureau, CRM or support systems that will supplement the feedback to provide a complete picture
- Agree steps required to turn insights into actions
What drives success and keeps the programme at the centre of the business are goals that you set, the KPIs that you prioritise, and your ability to turn the insights into actions.
The goals that you set will determine what areas of the business are highlighted, however any VOC goal will ultimately have a positive impact on churn. Here are some popular examples:
- Increase Customer Lifetime Value
- Improve customer service
- Reduce customer service or bureau costs
- Increase subscriber retention and loyalty
- Increase subscriber satisfaction
Your KPIs will track progress towards achieving your goals and measure outcomes. To be truly effective, these metrics should be included as a part of your overall business performance tracking, along-side sales and financial data, and distributed to the whole leadership team within your organisation.
Linking this data to overall profitability is the most effective way of allocating resource consistently and effectively across the business.
- Customer lifetime value
- Customer retention rate
- Customer satisfaction rating
- Net Promotor Score
- Contact centre activity (volume/topic/time to resolve)
If you outsource services, then you should align your service agreement with your VOC KPIs so that your service partner is aligned to achieving your business goals. For example, if you just measure your contact centre based on how quickly they answer calls then the unintended consequence may be poor call quality and poor customer satisfaction.
Your actions are what delivers the value from any VOC programme. Demonstrable action is what will keep your customers and your front-line staff engaged. When they can see that their feedback delivers results they are more likely to contribute to future initiatives and reciprocate with their loyalty.
Common ways to act on customer feedback:
- Improve engagement and automation
- Integrate support systems
- More online help
- More effective training for front-line support staff
- Better internal communication between marketing and support teams