4 ways to reduce customer churn during COVID

The coronavirus pandemic is a challenging time for everyone.

As a subscription business, you may be seeing increased churn as your customers look to cut costs due to the economic impact of COVID-19.

Fortunately, there’s a lot you can do to both retain customers and act with compassion.

Collect the appropriate feedback

First off, you need to know which customers are leaving due to COVID-related hardships. Those that canceled due to the pandemic may very likely return when the economy improves, and you’ll want to be able to reach out to them down the road with a win-back campaign.

Example question from a ProsperStack customer exit survey

If you already have a customer exit survey, add a COVID option to your “reason for leaving” question. If you don’t have an exit survey, now’s the time to add one. The feedback you receive from canceling customers can be used later in re-marketing but can also be used to immediately present special offers that retain customers.

Get creative with payment and service options

Customers may think their only option is to cancel your service. Here are four alternatives you can present to your customers:

  1. Offer a temporary discount — Price may be the most pressing issue for your customers right now. Consider offering a few months of free service to keep them as a customer. Taking a temporary hit now is better than losing a customer altogether.

  2. Upgrade their plan — Most SaaS products have different tiers of service. Offer a free upgrade to the next highest plan. Those added features just might increase the value of your product to the point where you’d prevent that customer from canceling.

  3. Defer payments — It might not be realistic for all companies to offer free service for any period of time. Another alternative to losing a customer is to defer payments for a specified period of time, e.g, up to 3 months.

  4. Create an "on hold" option — With this alternative you put the customer's account into a read-only state and guarantee that data will not be deleted. Consider doing this free of charge or for a low rate since they won’t be able to use your product or service during this time. Be sure to provide an easy way to re-upgrade the account to their previous plan.

Be compassionate

A global pandemic is unprecedented during the SaaS era.

As a subscription business, you may have some clients that are in thriving industries during these tough times, while others, or even most, are facing the most difficult challenges they ever have.

Your customers won’t forget you were there for them during these trying times. Handle their requests the right way now and you’ll have a customer for life.


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