Churn management

5 Cancellation Flow Mistakes that Impact Client Retention

April 20, 2023
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Are you making one of these common mistakes in your cancellation process?

While it might sound counter-intuitive, one of the most effective customer retention strategies you can implement is to improve your cancellation process. A thoughtful cancellation process improves the customer experience and can persuade many customers to remain customers with targeted deflection and offers.

In this post, we explore five common mistakes we see subscription companies make when dealing with cancellations and provide tips to avoid them.

Mistake #1: Making subscription cancellation difficult

When your subscription cancellation process is complex or hard to find, you risk harming your reputation or setting the stage for a negative review. Instead, focus on making your cancellation flow easy.

When a customer’s last interaction with you is seamless, it leaves a favorable impression of your brand and increases the likelihood they’ll share positive feedback or refer others. Here are some easy-to-implement tips:

  • Make sure your cancel button is easy to locate

  • Keep your entire cancellation flow to just a few clicks

  • Share what happens once customers click cancel (e.g., what info they lose access to and what happens next in terms of final charges or data download deadlines)

6 Reasons You Should Allow Self-Service Cancellation

Mistake #2: Not asking for customer feedback

Another mistake we see subscription companies make is not asking for customer feedback at the point of cancellation. This is a missed opportunity to identify and fix issues directly correlated to your monthly recurring revenue. We recommend a churn survey that asks two key questions:

  • What is your primary reason for leaving (multiple choice)

  • How can we improve (open-ended)

Now it’s time to act on what you learn. Share the feedback with your customer success team to help them understand where customers need more support. Your marketing team can use exit survey results to create targeted campaigns or tailor your message. And your product team can prioritize your roadmap based on what customers want – and what missing features cause them to leave.

2 Questions to Ask in Every Customer Exit Survey

Mistake #3: Trying to upsell during cancellation

When a customer clicks your cancel button, read the room. Now is not the time to upsell. A better option is to give customers a persuasive and compelling reason to stay.

For example, you can:

  • Extend their trial period for a defined timeframe

  • Provide a temporary discount such as 50% off for three months

  • Pause their subscription rather than cancel  

  • Change their plan to a lower pricing tier or free option

This approach works even better when you pair what you learned in your churn survey with the offer you make. For example, offer a discount when your price is the primary reason for leaving.

Mistake #4: Treating all customers the same 

When it comes to cancellation, not all customers are the same. Don’t make the mistake of giving everyone the same retention offers. A better strategy is to segment your customers and tailor your incentives to people with different needs.

For example, you can divide customers into groups based on payment criteria like MRR, billing interval, subscription duration, or plan. You can also incorporate custom data from your application or take advantage of ProsperStack’s integrations and use data from your CRM or CDP. 

Segmentation has two primary benefits. First, highly targeted offers increase your likelihood of success, because they make more sense to the customer. Second, you can analyze your results to see how your offers and deflections impact each segment.

Mistake #5: Ignoring canceled customers

Your relationship with subscribers doesn’t have to end when they cancel. There are natural opportunities to re-engage customers through winback campaigns – targeted emails focused on reactivating past customers. When done well, winback campaigns are an effective and low-cost way of re-engaging customers and increasing revenue.

Winbacks are another place exit survey data shines. By helping you identify the reasons particular customers left, you can target them based on their needs. For example, if a customer cancels due to product features, you can them with a winback campaign that coincides with the release of that feature.

5 Effective Winback Campaign Strategies to Implement

Save customers, grow revenue

It’s never easy when customers want to cancel, but you can turn your cancellation flow into a retention machine by avoiding these common mistakes and providing a more positive cancellation experience.

ProsperStack customers reduce their churn 10-39% by integrating our automated customer retention platform. We’re a seamless, user-friendly, and low-code solution to build the cancellation flow of your dreams, all without heavy lifting from your dev resources.

Whether your customers want to cancel or decide to stay, make it the best experience with ProsperStack: subscriber retention done right.

Learn more about ProsperStack Retain or get a demo.

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