3 behavioral tips that helped Kontentino decrease the churn rate in 2020

Case studies
2020 Nov 16
By Kristína Radová

How to keep your customers when your product is cool, but the times are cruel? 

Kontentino is handy. Not just because it’s a reliable tool that allows agencies and brands to manage their social media more efficiently. On top of that, it helps coordinate teams and facilitate collaboration. Not bad I’d say. 
 
But spring 2020 wasn‘t cool, but rather cruel. Subscription services, including Kontentino, really took a hit. The first thing many of its customers did was ask to cancel their subscription.

The monthly average churn which used to be around 2%, rose up to 15% during the first months of the first wave. 
 
Solving this pickle required a shift of perspective and some leg work. And luckily behavioral economics is just the right thing to turn to when things go south. 

Redirect the attention 

We proposed several ideas to keep as many customers as possible, but still be able to maintain at least a shred of past revenue. 
 
The first step was to shift the conversation and attention. We instructed the retention team not to ask the most natural question in this situation  „Why are you calling to cancel?“ and instead ask “What is the main reason you’ve been using Kontentino so far?”
 
Adobe tried this in India and it led to an 8.8% increase in customer retention. 
 
It’s similar to counseling an estranged couple  – a good therapist may choose to reframe the conversation and move away from why do you want to leave this schmuck, to what made you choose this person initially. 
 
And as people start coming up with reasons, the conversation might take a different turn and even lead to a different outcome. 
 

Second thing was to show that you (as a company) get it. This is called Unity. It makes one more likable and also persuasive. This is an evolutionary shortcut – we are more likely to listen to people we like than those we don’t (right, mom).
 
Important caveat – faux won’t do. This isn‘t fake it till you make it kind of situation. In Kontentino’s case, compassion and understanding came naturally.  

Lean in to listen before you offer

Before offering anything we instructed the team to lean in to listen and then acknowledge the reason for asking to cancel are legit. This way they first let the customer know that they are understood and you might even be on the same boat. 
 
So we recommended saying something like this along the lines: “I see, I’ll be honest with you, we’ve been experiencing the same issues lately.”(summarize the troubles) or “Yeah, I feel you, it's not business as usual for anyone right now.” 

Finally, we let customers choose and pick an alternative that would best fit their current needs. 

We assisted Kontentino to tailor-make this proposition to fit each of its target groups and the specific dire straits they found themselves in (some clients had lost all income, while others were not hit so hard, but wanted to save some money nonetheless). 

And because the offer came after the listening part people viewed it as even more personalized eg. valuable (for more info check the idiosyncratic fit).

This intervention helped to drop the number of people who canceled the subscription by half. And the subsequent activities caused 15% of the clients to sign back in after a few months.  

Bonus tip

If you find yourself in a situation where you’re trying to decrease churn. If you suspect that the only reason to cancel your service is to save up, you can ask for a solution directly from the customer. 
 
“What could I do so you could keep using XX – to find a solution which works for you even in this situation?” (restate the benefits they had told you already). 

Then you can sparkle it up with the behavioral principle called Perceived Value (or you can find more also under the term Fairness). If you wanna get to the bottom of this principle check our masterclass
 
“Let me check if we can figure something out in your specific case…” Then wait a minute or two before the next response. The point is to show them you’re making an effort on their behalf and come up with alternative solutions to their problem.
 
“Okay, so I’ve just looked into it, and considering the current situation you’re in (refer to the situation they mentioned) we could make an exception and offer you either XX or XY. Does that help to fix your problem so that you can still do XX?” (mention features customer values and mentioned them earlier).
                                    
You have listened, shown them that it's not the product itself they wanna cancel, and you’ve even gone about and beyond to come up with alternatives to adjust to their current needs. At this point, the ball is deeply in their court. 

 

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