6 things to do when a customer announces they’re churning

Getting an email from the customer saying that they’re not going to renew their subscription is always a bad experience for a customer success manager (CSM). Unfortunately, in many cases, the decision has already been made, and there isn’t much CSMs can do. It doesn’t mean, however, that they should not try to do everything possible to retain the clients until the last day of the subscription period. Overall, based on the experience of our team, I can confidently state that the “putting out fires” strategy of jumping from one customer to another a month or even a couple of weeks before the renewal date and trying to save them hasn’t proved very effective. It’s much easier and more strategic to take the necessary action in advance by successfully onboarding the customers, helping them with product adoption, etc. So as a result, these disappointing emails from the clients are not arriving very often. But some situations are out of the CSM’s control. For example, the customer has been unresponsive for a while, or the client’s organization has been acquired, and the parent organization has already been using a competitor’s solution. What can or should be done when the customer informs you that they’re going to churn?

Ask for reasons

The most obvious thing that many people forget to do is to ask why that decision was made. A quick tip from our experience: Choose your words carefully when responding to the cancelation email. Clearly acknowledge that you got their message and will take the necessary action (for example, if your contract has an autorenewal as a default condition, explicitly confirm that you will inform the right department to disable it). This is important because the customer sees that you’re trying to help instead of instantly pushing back to revert the situation. As a result, the client is usually willing to share the details of what went wrong (if something did) and the factors that affected the decision to cancel. Ask follow-up questions, but don’t be too pushy. There’s no single correct approach here — it all depends on the customers’ response. Usually, it’s easy to notice when the customers are open to having a conversation and when they just want to get a confirmation of cancelation.

Review whether something can be done to address the reasons

I would like to start by reiterating: Do not get your hopes up on this one. In most cases, when the client announces that they’re going to churn, the decision hasn’t been made in a day. Instead, disappointment has been accumulating for a while, and it’s highly unlikely that CSMs could turn the tide through one or two conversations (by the way, I wrote an article about such edge case scenarios — if you’re interested, feel free to review it). But it would not hurt to give it a try. For example, the client may be looking at your competitor’s solution because your product lacks certain features.

However, the client may not be aware that you released such a feature in the last few months. Or the client may be disappointed with their current representative — e.g., their account manager. So if you offer to change their representative, they might consider staying. In our experience, a noticeable percentage of customers retained at the last minute stayed not because one specific problem was fixed but because of various things, big and small, that we could address immediately or promise to address with a clear ETA. For example, the feature requested by the customer may not be there yet, but the CSM has reviewed the roadmap and confirmed that it is scheduled for release at the end of the current quarter. In such cases, the CSM confirms (written form works best) that the client will get access to the desired functionality by a certain date.

Try agreeing on a downgrade churn instead of full churn

The client staying with your company is always a better outcome — even if they decrease their spending on your product. While you suffer an immediate financial loss, you at least keep the door open to mend the relationship, increase the client’s usage of the product, and potentially return to and even grow the initial level of spending. Always ask whether retaining at least some level of usage of the product could be an option for the client. Maybe your product is currently being used organization-wide, and you can agree to keep it, at least for the HR team. Maybe the client has a budget constraint this year, and while they’re very excited about your product, they simply can not retain the current level of spending. You can offer a cheaper plan, decrease the number of seats, etc. Be prepared to offer different options to the customer. Downgrade churn is always better than full churn.

Deliver value to the last moment

Even when it becomes clear that there isn’t any chance of retaining the customer, make sure that you deliver excellent customer service until the very last moment. There are cases when churn itself isn’t necessarily connected to disappointment with your product. It could be a decision made by the executive team, budget constraints, and other factors. Good service is always remembered. Maybe the client is going to cancel the subscription right now, but when the situation changes, they will send a nice email stating that they would like it to be reinstated and want you to continue being their CSM (this has happened to us many times). Maybe the champion has moved to a different organization, and their first decision would be to get your product. You never know. So, help wherever you’re able to help. Even if it’s exporting the data from your solution so it can be imported into a competitor’s platform.

Communicate that you will always be happy to have the customer’s business back

Receiving an email about account cancelation isn’t a pleasant situation. But it doesn’t mean that CSMs should not leave the door open for the clients’ return. Make sure to thank the customer for choosing your product initially, if possible — share some highlights of how it helped their business and explicitly communicate that you’ll be happy to have their organization as a customer again. Yes, this probably will not be a game-changer, but it will most definitely characterize you as a professional.

Document key findings

Every CSM makes mistakes. But only those who continuously learn from their mistakes grow fast and demonstrate better results. Document why the customer has churned carefully. In an ideal world, you should have a well-categorized directory where churn reasons are grouped by client segment, industry, size, and other factors. In that case, not only would you be able to better address similar cases in the future, but you could also identify any trends and have a more strategic approach to fighting churn. It’s a good idea to create a list of categories so that the CSM documenting the churn can select the relevant one. Examples of such categories may include:

• Missing functionality (elaborate in the text field)
• Pricing
• Integration
• Customer service
• Other

The more cases a customer success manager handles, the more experience they get, and their “last-minute client save” rate will grow. It’s important to remember these steps when you receive the request for cancelation instead of just quietly canceling the subscription.