When and how to “celebrate” churn

Exploring the concept of successful churn

Wilson Sadowski
Jan 22, 2019 · 4 min read

Last week my team at ProfitWell welcomed our client to consider the cases in which customer churn should actually be considered a “win” for their business.

Naturally, it’s against a subscription company’s ethos to “celebrate” churn. As we’ve written before at ProfitWell, churn is the silent killer of a subscription business. A high churn rate fundamentally threatens a subscription company’s existence.

But is there such a thing as good churn? Is it ever appropriate for a subscription company to actually celebrate certain cases of churn?

In the case of outcome-driven services, we think so.

Summary

  • As the world continues to embrace subscriptions, more and more businesses are adopting the subscription model in an effort to develop stronger on-going relationships with customers.

Defining ‘successful churn’

When a service is designed to drive users toward a discrete outcome, and the outcome is achieved

If a customer churns with a glowing recommendation of your business (e.g., positive reviews, intent to return as a customer should the problem the service solves arises again), then a business ought to celebrate. The product/service delivered the value it promised the customer!

Examples

Growth opportunities associated with successful churn

It’s no secret that churn, whether it’s good or bad, hurts a subscription company’s bottom line. If revenue from net new customers does not offset your ability to retain revenue from existing customers, you’re dealing with a leaky bucket of a business that’s bound to become totally parched. And you cannot rely on the positive morale of your happily churned customers alone to save your business.

So what steps can your subscription company take if you’re successfully churning customers?

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Capitalizing on successful churn means optimizing around a ‘tipping’ bucket rather than a ‘leaky’ bucket

Acquisition | Continued engagement

Despite the fact that your customer churned, if they were ultimately happy with the service then you should make an effort to continue to engage them.

But not through enrolling them into drip email campaigns. It’s important to not think of churned customers like leads, because they aren’t. They are more like old friends who you can trust will rely on your service again should the problem you solve arise again in their lives.

Instead, keep them informed with how you’ve been improving the service. Give them the opportunity to inform you about how your service helped them achieve their desired outcome. Welcome their thoughts on how their lives have benefited from the experience using your service.

Continued engagement with happily churned customers can benefit your business in a couple of ways:

  • Product Marketing: Having a rich understanding of your happily churned customer’s success stories provides great product marketing fodder, which should help from a customer acquisition perspective.

Monetization | Identify opportunities for expansionary revenue

While successful churn means the product “did its job”, measuring and monitoring a successful customer’s experience may illuminate opportunities for cross-sell or up-sell to additional products or services.

Related questions to think about that may help drive strategic planning and product development:

  • After a customer achieves the intended outcome, do they adopt an adjacent product or service?

Conclusion | Your TL;DR

Subscription executives face tremendous pressure to track and manage customer churn as it represents arguably the most important lever of growth for their businesses.

And in a world where outcome-driven services continue to gain market share and businesses continue to develop a richer understanding of their customers’ desired outcomes, we challenge subscription executives to:

A) celebrate when you successfully deliver the value you promised to customer;

B) broaden the scope of the outcome you’re helping your customers achieve or discover adjacent outcomes you can help your customers achieve;

C) strive for an even better understanding of happily churned customers and try to acquire more of them.


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