Decreasing churn rate of a Marketing SaaS by 50%

The challenge:

Kontentino, a useful marketing Saas tool, took a beating in the spring of 2020. Their monthly average churn rate, which used to fluctuate around 2%, shot up to 15% during the first few months of the coronavirus crisis. Customers either asked to cancel their subscription altogether, or to downgrade their plan. Kontentino needed to find out what could be done to convince them to stay. 

The approach:

The first thing Kontentino did was make the cancellation process more difficult. Instead of just canceling online, customers first had to talk to a customer service representative. 

The client also came up with a combination of possible incentives. Our job was to suggest how to present them. We prepared specific talking points for their retention team: what to say, how to say it and in which order during that crucial conversation to make clients feel more compelled to stay.

The solution:

We inserted 5 psychological principles into the conversation. It was crucial to apply them in an exact order:

Reframing

We replaced the initial question: “What makes you want to cancel?”, with: “What’s the main reason you’ve been using Kontentino so far?”

This reframing meant we directed the focus of the conversation to the benefits of the service. As customers answered, they weren’t focusing on what no longer worked for them; instead, they were asked to pay attention to what they valued. This planted the seed of doubt early on over whether they really wanted to discard it.

Psychological reactance 

To avoid customers’ anti-persuasion radar from turning on, representatives were instructed to first listen and even acknowledge that the reasons the customer wants to cancel the service were legitimate. It helped customers feel like they were in control, and ultimately made them less tempted to argue against the subsequent proposed solution.

Liking

The Kontentino retention team were encouraged to point out that they and the customer were sharing a common peril or to simply acknowledge the customer’s troubles. This was done to create a sense of liking – an evolutionary shortcut that makes us more likely to listen to people we like than those we don’t.

What it actually looked like: 

“I see. I’ll be honest with you, we’ve been experiencing the same issues lately.”

essentially summarizing their troubles

 “Yeah, I feel you. It’s not business as usual for anyone right now.” 

Personalisation

Some clients had lost all their income while others weren’t hit so hard but wanted to save some money nonetheless. So we crafted a unique offer that would accommodate each of the target groups and the specific circumstances that they found themselves in. 

Alternative of choice

Depending on which group customers belonged to, Kontentino offered not just one but two solutions to fix their problem and asked them to pick the alternative that would best fit their current needs.

It meant customers would feel more in control and also moved the decision from whether to accept or reject an offer to which of the two offers customers preferred to go with.

The results

The numberof customers wishing to cancel their subscription dropped by half as a result of these simple interventions. The subsequent activities we designed later on caused 15% of the clients to sign up again after a few months.