stop losing clients, the no BS guide to preventing churn

Summary

every entrepreneur with monthly recurring revenue spends 80% of their energy on acquisition and almost nothing on retention. that’s backwards. fixing churn is cheaper than buying the next customer.

three plays.

1. track engagement. log every meaningful interaction the customer has with your product. when engagement drops, the customer is already leaving, you just don’t know it yet. that’s your early warning system.

2. proactive engagement. generic check ins do nothing. reach out about the specific thing this customer is stuck on. they feel seen, you save the account.

3. exit surveys. when someone leaves, ask why. then actually read it. the answers tell you exactly what to fix.

automate the boring parts of this so it doesn’t eat your week. and accept that 0% churn isn’t real. some loss is healthy. but most of what you’re losing right now is preventable.

Transcript

introduction to churn and its impact on businesses

The most impactful business is the business that genuinely improves another human, a better human business. And to grow a business like this, you have to continually improve yourself. This podcast is a documentation of that thesis, scaling businesses and also personal growth. My goal is for you to shortcut this journey. So if you’re ready to try hard, subscribe. If you like what you’re hearing, please share and enjoy. Quit losing customers. Let’s talk about churn, preventing churn, preventing customers leaving your business today.

This is the Better Human Business Podcast. I’m Jerred Moon and I have a lot of experience running monthly recurring revenue businesses, people who pay for a product or service on a monthly basis. And what will kill you is churn, people quitting the program. A lot of people focus on sales, marketing, all front end stuff, and they completely neglect keeping those people around. And I get it in the beginning stages of business. You just need the people.

And then after you have the people, how do you keep them around? And there are a million ways to do this. And I can’t cover every single churn strategy that I’ve learned in a decade of running MRR businesses. But there are three things that I think can help you dramatically reduce your churn rates. The first thing is tracking engagement. Now this could be different for every single business, but tracking engagement, however you can, is the first thing you want to start tracking, okay?

detailed discussion on the importance of tracking customer engagement

That way we can get start getting some data because what we’re doing is we’re trying to prevent someone from leaving and they’re normally signs ahead of time that someone is going to leave within the next month, within the next two months, three months, these signs pop up. And if you don’t learn how to catch them, you’ll start losing more and more people. Okay? So first off, start tracking engagement and engagement isn’t as complicated as it sounds.

If you have like an online community or something, there’s an easy way to track engagement. It’s like how long, how engaged are they? Are they posting comments? Are they logging in frequently to the membership platform? Those kinds of things. That’s for an online business. But also in any marketing efforts, if you sending out emails, who’s clicking, who’s opening, those kinds of things. And then the utilization rate, if you have someone coming into your brick and mortar, how often are they coming in for that thing versus how many times are they skipping?

Very important to know. And then ultimately you just write all of the possible engagement points that someone could engage. However you think that they can engage with your business, you write them all down every single thing. And it might be, you might come up with three, you might come up with 30 and then you start realistically thinking, will this actually matter if someone is doing this thing or not doing this thing? And then you start tracking that.

exploring effective customer engagement strategies beyond basic check-ins

And then if you can automate the tracking of engagement, now you can start to pay attention. And really this is just, we know what we want to track and we’re just going to watch it. Okay. Because it’s like running a good experiment. Like you have the hypothesis, I think I’m going to track these three things for engagement for my customers. And then you start to see like, oh wow, they started engaging less. And then two months later, boom, they’re gone.

They quit. You’ll start to realize those things. But most people aren’t tracking engagement. They might track churn. Like that churn is easy to track. It’s like how many, how many people did you lose this month versus how many do you have? And once you start tracking churn, that’s great. But engagement is upstream from that, right? It’s like, okay, once we start seeing engagement drop, then we start seeing churn happening. So that’s the first thing, track engagement.

the benefits of using exit surveys to gather actionable feedback

The second thing is you have to engage with your customers by solving their problem. Okay. And one thing that I, I don’t like to do, and this is the knee jerk reaction of everyone is if I, if I say, hey, you’re tracking engagement, but then the second thing is you need to go proactively engage your customers, communicate with them. The knee jerk reaction is, hey, just checking in, like, hey, I’m just checking in email, right? It’s the worst email you can possibly send.

I just, just checking in. How are you doing? Like, I’m, I’m doing fine. Thanks. Like, don’t do that. Okay. So you want to engage your customers. But if you already know of their problem, why not mention it specifically? Okay. And maybe add some solution or context, paint a better picture so it feels more individualized because just checking in is an email you could send to every customer you have who pays you monthly and it could be very short.

summary of how these strategies integrate to reduce churn effectively

Just checking in. Hopefully you email me back and say something worth talking about. But if someone’s, you know, in your clinic dealing with knee pain, okay, hey, how is your knee doing? Just want to check in. See, you can say it now, but it’s going specific to them. Like here are a couple exercises. How have you been feeling about these exercises? That’s one way you could do it. You could also say if, you know, on my side in the business world, like, hey, I know you’ve been struggling with time management.

You’re supposed to hire another employee. Where are you at in that process? You’re holding people accountability, accountable, you’re checking in, but you’re also checking in on a specific problem that they are trying to solve. So if you’re wondering, okay, well, how do I engage them? Go back to answering the question, what problem are they trying to solve and how can you check in on that problem as opposed to checking in on that person? Check in on their problem they’re trying to solve.

closing thoughts on the long-term commitment needed to minimize churn

Don’t check in on the person in general. And if you can do that with your engagement, that’s going to help a lot more than you realize with churn. And there are ways that you can automate that, but I can’t get into it in the podcast. You can automate personalization. It’s not, it’s not crazy, crazy complex, but we will get into that at a later time. The third thing is exit surveys, okay? This is if you’re just trying to figure things out, like I said, everything is a hypothesis.

So the first thing is you, you pick a couple of different engagement patterns. Like how do they engage? You see if like, okay, these people didn’t stop engaging here. They churned here and then you find out, okay, if I start trying to get them to engage more when I start seeing these, you know, specific failure points, they’re not engaging as much. I’m going to reach out to them directly. I’m going to do proactive engagement to get them to engage and then stick around.

But you, these are all guesses, right? So you can then have an exit survey. I recommend an exit survey for every business that has, you know, monthly recurring revenue where a, you know, a person is quitting essentially. Because a lot of the times people really like your business and there may have been something that like pissed them off or was confusing to them, like whatever. And they, they will happily tell you about it in a very short survey.

So when someone does leave, just, you know, this can be an email or in person, whatever, just a quick one question like, you know, what could we do better? What could we improve? What could we have done to keep you around? Any version of that one question, leave it open ended and then start reacting to that feedback. So if they’re like, yeah, I just, you know, in my instance, I, things that I’ve picked up like from garage gym athlete, yeah, the, the onboarding process was really confusing and that, that might be someone churned within two weeks and I’m like, what, what happened with this person?

Why’d they quit? They were confused. They didn’t understand something. Okay. Can we put emails around this? Could we have video instructions and tutorials about how to do this thing? You know, that there are very easy ways and problems you can fix, but if you just don’t know, you’re like, ah, people are quitting. I don’t really know why exit surveys will get really specific. Not every single person is going to fill it out, but the ones who do really care about your business and they, they want it to probably stick around.

They might even come back. They most likely will come back, but you need to have the exit survey to know like, okay, people didn’t understand this, or you might find out your price point is off. And that typically doesn’t mean you, you want to lower your price or anything like that, but maybe it was too much for a monthly recurring business. And maybe there are different packages or plans that you can create. So lowering the price is almost never the answer, but maybe there’s something else they would have stuck around for.

And that’s another thing I could do a whole podcast on is like this whole, this pricing methodology, people like everyone wants to charge the highest possible price they can. And then if you don’t, if you’re there, if they’re not willing to pay it, then you’re just kind of like, well, we’ll screw them. I just want the people who are going to pay it. That’s great. And I get it. I get the, the financial, like wealthy mindset and abundance mindset and all that crap.

But how about both? How about I serve the really high paying client who wants like the individualized service, but then what if I have just a separate service that has not as much attention individually that people could sign up for? And now we have both customers as opposed to this whole, like, no, you got to charge what you’re worth. And it’s gotta be a lot of money. Like, screw that. Why don’t I’ll do both. Like, I’ll just do both.

So anyway, I’m not going to get into the whole pricing methodology. I just think the industry is headed in a weird direction with that right now, but ultimately find out why they left. And if you find out why they leave, you start fixing those problems one survey at a time. Your churn is going to improve. You’re going to find out where your weak points are as a business owner. So that’s it. Those three things, track engagement, engage your customers and do exit surveys.

If you can start doing those three things, you will start dramatically reducing churn. And this doesn’t happen overnight. It takes a long time. It could take one, two, three years of just continually going through this feedback loop until you kind of have it dialed in. And then you might staff just find out that there’s a certain level of churn that is acceptable because churn normally starts high when people start MRR businesses because they don’t know what they’re doing.

There are a bunch of gaping holes, but churn at 0%, meaning no one ever leaves is impossible. But so you’ll, you’ll find out like, okay, this is the percentage of churn that is okay here in my business. As long as we’re in that parameter, then I think we’re good. But it’s going to take all these feedback loops to get there and to get there, you’re going to have to try harder.