It is a moment every business owner dreads- you just received an email from a customer requesting to cancel their contract. Do not panic, there are a few ways you can still potentially save this account.
Instinctively you might be willing to do just about anything to save this customer. But it is important to pause, take a step back, and consider if they are trying to back you into a corner. In my experience, certain types of customers use the threat of cancelling as a technique to improve a contract from a position of power. Their goal is to put your company on the defensive or to present you with some kind of ultimatum. Do not fall into this trap.
One strategy for putting your company on the defensive is to wage some kind of attack- they suddenly claim that your product is missing a key feature, the Support team is too slow to respond, and so on. You should be aware of any ongoing concerns that line up with these complaints.
It is also a good idea to track the value this customer has received from your product or service so you can provide a compelling argument as to why your product or service offers good value.
Every customer who asks to cancel has one (or more) underlying pain points when it comes to your relationship. For that reason, the two most powerful tools you have in your toolbox to circumvent a cancellation are empathy and demonstrating value.
Why is empathy so important? The majority of customers who are considering cancelling want to be reassured that you hear and understand their problems. They want to know that things are going to get better, whether that is in the form of faster support response times or releasing a feature they really want built. Listening and empathising with their concerns can do wonders to strengthen the relationship and build the credibility necessary to save their business.
The second strategy (hopefully used with the first) is to effectively demonstrate the value you have delivered to the customer. Constantly look for opportunities to tie the value of your product or service to hard numbers. For example an HR product increased employee retention by 5% and reduced staffing and recruiting costs by £10,000; and so on. Being able to make a case for why your product is worth sticking with (or what they stand to lose by cancelling) puts you on more solid footing during a contract negotiation or cancellation request.
That being said, not all customers should be saved. There are some customers who neither receive value from your product or service immediately, nor realistically will in the future. Deciding to part ways with these customers allows your company to focus their efforts on customers that are more likely to be successful in the long-term.
You should contact every customer who has cancelled, or requested to cancel, to get feedback. People are generally more honest and candid when they have already made the decision to leave. Do not approach this call ad hoc- create a cancellation process and a standard list of questions to discuss during this feedback call. This is an opportunity to collect insights to share with all customer-facing teams, so do not forget to dig into how each department could have better served this customer. Finally, grouping cancellations into a few categories allows you to track churn trends over time.
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