So You Have a Customer Retention Problem… Now What?

Are customers signing up for your product, and never returning? If so, you’re not alone - plenty of startups face issues with customer retention. Once you notice that your customers are signing up but not sticking around, it’s important to solve the problem as quickly as possible. A high churn rate can be an absolute company killer, since it will start to negate your customer acquisition efforts.

This guide will walk you through investigating customer retention issues, common customer reengagement tactics, refining your process, and preventing future issues.

Investigation

The first step to tackling a customer retention issue is to examine who exactly is churning from your product. For this, you’ll want to define when you consider a customer as “churned” - maybe they signed up once and never came back, or they haven’t logged in for over 30 days. Then, you’ll need to find a list of users who fall into that criteria.

Depending on your tooling, you may need to have an engineer on your team directly query the database. You can also use analytics tools such as Posthog or Heap, or user insights from tools like PropelAuth.

Once you have your list, you can start your investigation and see if any patterns stand out. A few things to evaluate are:

• Does this user seem like they fit into our target customer profile?
• Where did this user come from? Was it a marketing campaign, a blog post, just signed up from the website?
• What did the user do before they stopped using the product? Did they complete our onboarding, test out any features, etc?
• Has this customer reached out to us with any other context as to why they may have churned?

In some cases, you might find that the majority of the users who churned actually don’t fit into your target customer profile, so them churning is somewhat expected. In those cases, you likely need to take a look at your acquisition methods and make sure you’re working to bring the right users in the door.

You may also discover that there’s a particular part of your product where the majority of your customers are getting stuck. If you see a pattern like that, you’ll want to review that feature and see what you can do to improve the user experience.

However, if you’re looking at a long list of customers who you believe should have been retained, and they don’t seem to have all gotten stuck at the same point in your product, then it’s time to try some reengagement tactics. In the next two sections, we’ll discuss some options for reengaging your users.

Personalized Reengagement Tactics

Since you already have a list of users to work off of, and some data about each user, you can pretty easily try some personalized reengagement. Basically, this involves reaching out to the user with a message tailored to what you think their needs are - maybe a link to a docs page or guide that users find helpful early on in setting up your product. You can also send a more general message asking if they need help.

Ideally, you should send this message directly from your inbox, lest it gets marked as spam or looks like an automated message. If your end user doesn’t think that they’ll get a reply, they’re a lot less likely to reach out and ask for help.

Another excellent touchpoint is to personally reach out when you’ve added a feature the customer has requested. You don’t even necessarily need to wait for them to have churned - letting them know that you prioritized their request and letting them know about it will help them feel more bought into your product and they may be less likely to churn in the first place.

Broad Reengagement Tactics

Another tactic for reengagement is to implement some broader campaigns. These usually fall into two categories: helping the user get past any hurdles, and getting the user re-interested in your product.

Helping the User Get Past Hurdles

If you think users aren’t being retained due to struggling with aspects of your product, then one way to get them to come back is to send them some tips and tricks at appropriate times. This might mean after they take some other action in your product, or just at particular times after they’ve signed up. Most typically, these take the form of email drip campaigns - I’m sure you’ve received some.

Even though these emails are more automated, there should be an easy way for the customer to reach out if they need help - maybe a call to action within the email or a reply-to set to your support inbox.

Getting the User Re-interested in Your Product

It’s possible that someone signed up for your product either before they had a problem your product could solve, or before your product had the feature set necessary to solve their problem. It’s also possible that they were just busy and haven’t gotten back to being able to test you out.

No matter what, you need to be able to recapture their interest. There are a couple of approaches you can take here:

• New feature announcement emails - let them know about your new features to encourage them to return to your product (you should likely be doing this anyway, as it’s a great way to educate your active users as well).
• User testimonial & case study emails - hearing about how others have used your product to be successful can be the push a customer needs to give you another try.
• Social media posts - if your customers tend to find and follow you on social media, making sure to consistently post content that could appeal to them is a great way to remind them you exist without having to email them.
• Webinars - hosting a webinar on a topic your users are interested in can be another good way to get back on their radar.
• Retargeting campaigns - retargeting isn’t just for users who have never signed up for your product before - if you’re open to a paid reengagement approach, this can be worth a try.

Iteration

Just like with everything else, there’s no one size fits all technique for user reengagement. You will need to experiment with the options above (or come up with your own) and see if they’re having any impact. You may also find that different reengagement techniques work for different segments of your user base.

To make sure you’re able to collect the data you need, it can be helpful to create a segment in your user analytics tool of choice (here’s more information on user segmentation from Heap and in Posthog), or use PropelAuth’s reengagement reports.

As you try different reengagement efforts, keep track of what you did and when, and then return to your report to see if you see users returning. Note that you may still see users returning even on days where you didn’t do anything. In those cases “credit” should go to whatever reengagement efforts they may have experienced most recently. Don’t forget to keep an eye on combinations as well - sometimes it takes multiple touchpoints before a user returns, and that’s okay.

Make sure to adjust your efforts as you get more data - there’s no point in wasting time doing something if it’s not having the outcome you’re hoping for.

Preventing Churn

While there are plenty of tactics for reengaging your users once you notice a high customer attrition rate, it's obviously always easier to prevent churn in the first place. We'll go into that in detail in another article, but a few quick tips for you to start building your customer retention strategy:

• Make sure your new customers are the "right" ones. Customers who aren't a good fit for your product are obviously going to churn - why would they stick around?
• Check your onboarding flow. Getting your users off to a strong start is the best way to keep them coming back. Make sure that it's easy for them to get up and running.
• Audit your product. If you haven't done a customer journey exercise in awhile - this is a good time! Make sure you fully understand the experience your users are going through. If you run into issues - figure out how to fix them.
• Fix bugs quickly. While it's impossible for a product to be completely free of bugs, it's important to keep the customer experience of using your product as smooth as possible to prevent users from quitting in frustration.
• Be responsive. When you're lucky, customers will reach out to you to let you know that they're unhappy with or confused about an aspect of the product. Make sure to respond to them promptly, and provide good customer support. This also helps build customer loyalty, which is another excellent retention strategy.

Conclusion

Customer retention can be a tricky problem to solve, but if you have the tools you need to identify that you have a problem, do some deeper investigation, and run experiments, then you should see your retention start to improve. It won’t happen overnight - but it will happen.