5 Ways Your Cancel Flow Can Increase The Lifetime Value Of Your Customers
If you're like most businesses, you probably haven't put a lot of time into your cancel flow. It's human. We don't like thinking about endings. They're sad. Working on churn isn't nearly as fun as acquisition and focusing on new customers. However, our cancel flow is one of the most valuable customer experiences. Here are five ways your cancel flow can dramatically increase the lifetime value of your customers.
1. Overcoming the Cancel - The first one is rather obvious. Approximately 1/3 of the customers who click to cancel a subscription can be saved. As we can see, many customers aren't entirely intent on cancelling, and through a mix of problem-solving and personalization, we can overcome the objection retain our customers.
2. Information for Improvement - The information that our canceling customers provide to us is instrumental to improvement. This information provides the keys to what we need to improve to retain our customers and deliver value for a more extended period. If we're capturing details and data on the customer, then we know what's not working and, most importantly, for whom it's not working. This also helps us identify the "straw that breaks the camel's back," and if we have an adaptive cancel flow, then we're going to get really granular and understand precisely what drove our customer to cancel.
3. Improved Targeting - If we capture detailed data about our customers, we can use our cancel flow to identify the lifetime value of our various customer segments over time. This will help us optimize and trim our marketing/sales budget. It's unlikely that "EVERYONE" is our customer (a bad idea in most cases), so it becomes imperative to find the customers who value our product/services the most. Our cancel flow is the culmination of the customer lifecycle, so it can instantly update us on how our segments are behaving and where we need to focus.
4. Identify Risk In Active Customers - To predict which customers are likely to churn soon, we need to know who's cancelling today. Our cancel flow can provide this data and update predictive models on the fly, so we know what's likely to happen in the near future. The other beauty of using your cancel flow in this manner is that because your cancel flow is recording WHY a customer is cancelling, your predictive models can identify not just which customers are at-risk but why they might be at-risk. This is the key to getting in front of the churn before it happens. Our cancel flow can be the key to proactive treatments for our customers, eliminating customers from even getting to the cancel flow.
5. Winning Back Former Customers - Finally, if we understand which customers canceled, when they canceled, and why they canceled, we will have a much better idea of how to win them back. We have a 20-40% chance of winning back a former customer, while we only have a 5-20% chance of converting a prospect. Which makes sense. We know our former customers, and we know much less about prospects. Our cancel flow captures the most essential information possible for reactivating former customers.
It's not natural to want to spend time on your cancel flow, but if you do, your business will prosper because of it, and so will your customers. These are just a few of the apparent benefits that directly impact your customer lifetime value, but as you dive into your cancel flow, you'll eventually find even more.