Looking for the best customer retention software? This guide breaks down the sometimes overwhelming software landscape, from onboarding to offboarding.
Customer retention is no simple problem.
Customers churn for many reasons, from lousy onboarding and to cash flow problems, requiring retention activities that span internal departments, with touch points across product, email, social media, surveys, help desk, live chat, phone and more.
In recent years, an ecosystem of customer retention software has sprouted to address this multifaceted problem.
We'll help you make sense of it in this guide, which covers 7 categories:
- Billing analytics - Understand how customer retention affects the bottom line and track improvement over time.
- Onboarding & feature adoption - Set up new customers for success and increase engagement of existing customers with in-app tours, tooltips and messaging.
- Surveys & feedback - Collect actionable information in context, identify promoters and detractors.
- Behavioral analytics - See what your customers are doing in your app.
- Customer health - Combine data from multiple sources to get a complete picture of “customer health.” (No newfangled step-counting digital wristband required.) Then mine this data to predict which customers are at-risk.
- Dunning - Resolve failed payments and delinquent accounts.
- Offboarding - Reduce churn 10-30% by rerouting customers at the point of cancellation with relevant interventions.
Now that you have the bird’s eye view, let’s dig into the details of each category.
It might take a while for those new tooltips to have a marked effect on churn rate. Improving retention through customer satisfaction is a long game, but that doesn't mean there aren't any quick wins.
Both dunning and offboarding solutions start cutting churn from day one.
If you haven't implemented these tools yet, jump there and get to it!
You are what you measure. Tracking your churn rate over time is the primary way to evaluate the effectiveness of your customer retention efforts.
Billing analytics tools such as KissMetrics and Baremetrics sit on top of your billing platform (e.g. Stripe or Chargebee) and make it easy to track relevant metrics like MRR, LTV and churn rate. While overall churn rate can be calculated on a napkin, analytics tools allow you to segment customers based on criteria like MRR and create time-based cohorts for deeper analysis, which may paint a dramatically different picture than what’s next to the mustard stain.
Successful onboarding drives early user engagement, which is a key indicator of lifelong customer health.
For new customers, this means identifying the desired outcome and guiding them to achieve it with in-app tooltips, tours, walkthroughs, launchers, banners, notifications, lightboxes, and hotspots. (Some of these might be the same thing. Dunno!)
For existing users, increasing feature adoption is the name of the game. When you help customers maximize their value, not only will you retain them, but they’ll leave behind a trail of recommendations wherever they go on the web.
Why not build these bits and bobs in-house? For one, developer resources are at a premium. “Codeless” tooltips, tours, etc can be created at any time by support and success teams, without competing for a slot in the next sprint. Hosted solutions also provide metrics to measure effectiveness and ways to segment and personalize these materials. Standout tools in this category include: Appcues, Chameleon and Userpilot.
Feedback tools for customer engagement focus on in-app surveys and “microsurveys”–a single question or NPS triggered at the right moment. When short surveys are delivered in context, responses increase from a typical 8% in post-transaction emails to north of 50%.
Like “codeless” in-app onboarding tools mentioned above, these survey tools allow non-technical team members to seamlessly embed surveys into the product, allowing them the freedom and flexibility they need to perform.
Survey data helps teams understand user behavior and expectations, identify triggers of dissatisfaction, and surface at-risk accounts.
You can think of behavior analytics as Google Analytics for your product. These tools turn the raw data of user interaction (clicks, navigation, form submissions) into a timeline of events that can be analyzed in aggregate or per customer (e.g. a “user journey”). Behavioral analytics help you identify which features customers are using (or not) and where they get stuck, so you can resolve issues and help your customers achieve success.
For example, behavior analytics helped insurance company Lemonade identify a major conversion dropoff: customers were filling out a complex form but most people didn’t submit it. Digging in showed there was a bug on this page and a wishy-washy CTA. When these issues were resolved, conversions increased 50%.
While surveys and support requests can help identify at-risk customers, 96% of unhappy customers won't complain to you before starting to look for an alternative product. Customer health software can help surface these accounts, as well as show you your happiest customers.
Customer health software aims to give you a comprehensive picture of a customer’s engagement with your product and brand across all touchpoints, including in-app behavior, support tickets and social media. By combining data from all these sources, customer health software gives you a timeline of customer engagement activities, boils down everything to a single “health” score, and can proactively alert you about specific events or evaluations.
On average, delinquent credit cards make up 20-40% of overall churn. Dunning is the methodical process of communicating with customers to resolve these failed payments and resume subscriptions. Software solutions automate this process via email, producing immediate results.
Stunning, the original, has recovered over five billion dollars for its customers. Newer options like Vindicia Retain and ProfitWell Retain promise to improve upon conventional methods with sophisticated data analysis. Gravy takes a different tack, recovering failed payments with US-based retention specialists.
It might seem all is lost when a customer goes to cancel, but in fact 10-30% of cancellations can be deflected with relevant interventions, whether it be a support conversation, a plan upgrade or a coupon. Tools like ProsperStack replace your “Cancel” button with an offboarding experience that collects feedback and automates churn reduction.
Look for a solution that connects to your billing platform so it can correlate reasons for leaving to lost MRR and automate subscription modifications such as applying coupons, changing plans, pausing accounts or extending trials. This puts ownership in the hands of non-technical teams, allowing them to add and edit offers without needing to compete with other priorities for dev time. Analytics and A/B testing enable maximization of offer effectiveness, and thus ROI, above and beyond in-house solutions.
An embeddable cancel flow takes minimal development time to set up, is fully automated and starts reducing churn immediately. Why not try ProsperStack today?
There’s no silver bullet to lowering your churn rate. Customer retention is a multifaceted problem that requires a multifaceted solution, but thankfully there’s great software to help at every step. By implementing some or all of these solutions, your team is on the right track to seeing that hated number plummet. Good luck!