To best understand the churn risk flow, let's start by defining churn.
In SaaS, churn is the opposite of growth. It happens when a customer stops using your product or service. In the context of subscriptions, it's when a customer cancels their subscription or fails to renew it. You may also hear churned customers referred to as "lapsed".
There are two types of churn: involuntary and voluntary. Involuntary churn occurs when a customer's subscription is canceled for reasons that are not due to lack of interest. Most commonly, it’s due to a payment failure (e.g. insufficient funds, expired card, change in billing address).
Businesses can attempt to recover lost or overdue payments with a dunning series. Most payment processors offer a dunning series out of the box as it’s typically tied to a processor’s “retry” flow, which is when a processor periodically retries a customer's failed payment method in an effort to capture the outstanding funds.
Voluntary churn, on the other hand, happens when a customer chooses to stop using your product. This could be because:
Now that we know what it means for a customer to churn, let's focus on what we can do to mitigate it. One simple way is to identify your "churn risk" cohort and create an automation to encourage engagement.
Most companies consider their dormant (or inactive) users to be at high risk of churn. A dormant user is someone that previously performed some kind of activity (like a login), but has not been seen for a period of time. SaaS companies typically define dormant customers as those who have not had a session in 30-90 days.
In addition to inactivity, there are other ways to identify users at risk of churning, such as: if they haven't upgraded their subscription, if they stopped using a key feature, or if they were previously hyper-engaged but have since drastically reduced their usage.
There are several ways to build this flow. One option is to send push reminders or in-app messages. For example, send a message to users who haven't logged in for 45 days with a summary of new updates.
Another good option is to set up an automated email series. Below, we’ll explore how to set up a sequence of 4-6 emails to proactively engage your churn risk cohort.
1. Set up your trigger
We recommend creating a "Dormant User" list in your ESP and using this as your trigger. Customers should automatically be added to this list after they do/don't exhibit a certain behavior, such as logging in within the last 60 days.
2. Build your series
This series consists of 4-6 emails with a 7-day time delay between each email. It should be warm and engaging, and it should remind your customers why your product is valuable to them. Consider covering the following topics:
3. Test, measure, and iterate
As with any email series, it's important to test different versions of your emails (e.g. subject lines, copy, CTA) to see what resonates and converts best. Measure your results to see how many customers reengaged after receiving your emails, and adjust your content as necessary.
Lastly, remember that the goal of this series is not to hard sell your product—you already did that. Your customers signed up for a reason, so use this series as an opportunity to build rapport and remind them why they picked you in the first place. Show them how great it is to be part of your community. 😉
