How can you manage a product with a high churn rate?

Well sometimes churn may also happen by the external driving factors such as competitor's disruptive moves be it eye popping price or breakthrough innovation. Also it may happen due to regulatory changes which may not be complied by your product. Also here the mitigation actions change based on the rate of churn i.e is it a steep churn increase or it is something happened over a long period.

Managing a product with a high churn rate can be challenging, but with the right strategies, it's possible to improve customer retention and reduce churn. Here are some steps you can take: Understand the Reasons for Churn: Before you can address churn, you need to understand why it's happening. Analyze customer feedback, look at exit surveys, and review product usage data to identify common patterns or issues that lead to customers leaving. Improve Customer Onboarding: A good onboarding process can significantly reduce churn. Ensure that new customers understand how to use your product and its benefits. Tailored tutorials, welcome emails, and proactive support can help new users get the most out of your product.

Identify Patterns: Are there specific days or times when user engagement is notably lower? Analyse metrics like customer demographics, subscription plans, usage patterns, and customer tenure. Compare to Historical Data: Identify if the decline is a recent occurrence or part of a longer-term trend. This comparison can help distinguish between short-term fluctuations and more significant shifts. Competitor analysis: Analyze the strategies and features of competing platforms. Are users migrating to other platforms, and if so, why? Also, not all issues can be addressed simultaneously. Understand the primary drivers of churn. If a specific aspect of your product or service is causing the most dissatisfaction, focus on that.

Product Managers will have to deal with not just too many customers paving their way in but equally with the ones leaving us. Some things to keep in mind when the latter happens: 1. Speak to the customers 2. Take feedback and understand 3. Listen carefully to the unsaid nuances 4. Do a thorough root cause analysis 5. Now work on the patterns that are leading people to shy away 6. Data data data - look at it, work on it, interpret and draw insights 7. Now run retention programs like discounts, loyalty programs, extended freemium models and more 8. Furthermore study competition and places the customers are moving and come up with a plan to tackle it 9. Treat existing customers with utmost care 10. Be humble and accommodating #PM #KPKR

We all talk about how customer-centric we are but be honest: how often do you, or someone in your team, picks up the phone and calls a customer? At TaxScouts we implemented two policies that made all the difference. First, everyone joining our startup, regardless of team, had to serve a "tour of duty" in Intercom doing customer service. Second, everyone in the marketing team had to talk to at least two customers a week. In exchange of a ￡15 Amazon gift card, we got invaluable insights on why they signed up and what their impression of the product actually was. This was, as you can imagine, absolutely enlightening when trying to figure out why customers churned. And it was something no amount of data would have been able to tell us.

Segmenting your customers is key when you are facing high churn rate. This can help you to perform detailed analysis and drill down on user segment which are most affected and unable to retain. You can study user preferences, behavior, user needs, user personas to update your product strategy. For user segmenting the users, you can leverage user funnel, usage, frequency, acquisition source, personality, engagement level or demographics. For example you may segment as power users, first time users, premium users, churned users, potential users.

Finding churn & engagement patterns means finding out ways in which your most engaged users differ from the ones who are churning. Segment users who do what you want from those who don't, and identify ways in which they're different. Do the engaged users all live in the same city? Do all users who eventually become loyal customers learn about you from one social network? Are the users who successfully invite friends all under 30 years old? If you find a concentration of desirable behaviour in one segment, you can then target it.

After figuring out why customers are leaving, the next smart move is to group them based on what they do and what they like. This helps you adjust your product and how you talk to each group. Use simple criteria like how they use your product or where they came from. Think of it like sorting them into active users, those thinking of leaving, those who left, and potential new users.

One thing I have found helpful is to create User Personas of my customers. This tool helps me a lot in understanding who my customer actually is. This tool serves as a linchpin in comprehending the essence of our customers—unveiling details such as spending behaviour and technological acumen. By encapsulating the multifaceted dimensions of our customer base, we not only unveil hidden patterns but also foster a nuanced understanding of their needs and preferences. This depth of insight is instrumental in sculpting targeted strategies to mitigate churn and elevate the overall customer experience.

Segmenting customers is a pragmatic step in understanding the nuanced landscape of churn. It involves categorizing users based on common traits or behaviors to identify patterns. This analytical approach allows for targeted interventions, addressing specific challenges and enhancing retention strategies tailored to distinct customer segments.

We are in a generation where the customer would like to be part of the process with the companies they shop from/ engage with. By creating a community, companies are able to bring the customer as part of the building process. User-generated content and social media are another way to build community. UGC and SM will allow the customer to see themselves as part of the company instead of an external "shopper" group. Once an identity is formed, going from "I shop at xyz" to "I am part of XYZ", customers are more likly to stay loyal to the brand.

Many organizations do not have set pay plans, which can result in unfairness when onboarding (the process of bringing someone “on board” with the company, including discussion and negotiation of compensation) or offering pay increases. Make sure the process for receiving pay raises is fair and defensible, so as not to appear to be discriminatory. This can be addressed in both your compensation planning process as well as your retention plan.

There is no retention strategy you can implement that can fix a product that's not what customers want. Sometimes it's a pricing mismatch; other times an expectations gap: "I thought you'd do A, but you only do B". Not to mention technical issues, bugs, etc. The best retention strategy is to have a tight marketing-product-operations communication loop, where operations can quickly feed data into both product development and acquisition strategies. In plain English: "stop getting us these customers, they're not the ones our product is built for". Discounts? Incentives? Rewards? All nice, but won't fix bad product-customer fit.

Product manager's number one weapon is implementing effective user retention strategies. You can implement it in number of ways but below I provide some quick tips: To keep users coming back to your product, -Solve problems and unmet needs of the users -Create intuitive and seamless experience -Deliver user value -Create FAQ content, instructional videos, awareness about product, features to drive adoption -Build trust and relationship with the core users -Provide loyalty bonus, discounts, referral bonus, promos, discounts, rewards to subscribers or loyal customers -Fix user raised issues and communicate clearly -Respond to user reviews and complains in timely manner -Transparent communication on product initiatives -Measure NPS & CSAT

Now that you know why customers are leaving, step three is all about keeping them happy and coming back for more. Improve your product based on what they say and give loyal customers some perks, like discounts. Make sure customer support is top-notch, create cool content, and ask happy customers to spread the word. Regular surveys help you keep a finger on the pulse of customer satisfaction. It's all about making them happy, loyal, and eager to tell others about your product.

From my perspective, the final step of managing a product, especially one with a high churn rate, is critical and revolves around continuous monitoring and optimization. Tracking key metrics like churn rate, retention rate, CLV, CAC, and ROI provides a clear view of the product's performance and areas needing improvement. Implementing testing strategies, such as A/B testing, is essential in determining the most effective approaches for the product and customer base. This is not a one-time effort but a continuous process of evaluation and enhancement, always aiming to elevate product performance and customer experience. The goal is to turn insights into actionable strategies that drive positive change and growth.

Valuable insights have been shared here, emphasizing the importance of managing metrics like LTV, CAC, and Churn rate, coupled with thorough data analysis and customer feedback evaluation. Recognizing the 'use case' for the user is crucial, and obtaining reasons for churn proves challenging, often extending beyond data analysis. To address this, we implemented a direct approach by asking users (in our UI) to manually state their reasons for cancellation on the same page. This hands-on feedback has proven invaluable, offering authentic insights straight from the source to address them effectively.

Once you've made changes, the last step is to keep an eye on the numbers and make things even better. Check important stats like how many customers you're losing (churn rate), how many stick around (retention rate), and how much each customer is worth to you (CLV). Try out different ideas, like A/B testing, to see what works best. Keep fine-tuning your product and how customers experience it. Managing a product with lots of customers leaving is tough but worth it. These steps can help you keep more customers around and boost loyalty and revenue.

As a PM you have to continuously measure using qualitative and quantitative data to tweak your product to improve user retention. Continuously iterate and optimize your product based on usage pattern, user feedback. You can measure below key metrics when it comes to retention: - Churn rate - CAC - CLTV - returning customers (avg. week over week or month over month depending on product) - CSAT As a PM you should experiment new features and functionalities using A/B testing, closed user group testing by leveraging data to make user informed decision. Based on results evaluate it, if it performs well launch it at scale to improve product experience for your users. This will certainly lead to higher retention and lower churn over time.

It’s important to have a baseline of the current churn rate of customers over time. Test out improvements you believe will decrease the churn rate, then monitor the metrics to see if the churn has been reduced. Keep in mind that churn might not be caused directly from features. Pricing, positions, and customer types can all affect the churn rate. Bring your colleagues to support solutions to the problem.

In addition to all the suggestions mentioned above, invest in proactive communication and customer education: 1) Proactively communicate with users about upcoming changes, improvements, or new features that directly address their concerns. Transparency can build trust and demonstrate that you are actively working to enhance the product. 2) Ensure that users fully understand how to maximize the utility of the product to meet their needs. This can involve providing tutorials, documentation, or webinars to help users make the most out of the product, reducing the likelihood of churn due to misunderstanding or underutilization.

Four key things to understand fully before calling the shots are - 1. What is the period considered to define the churn for your product and industry? Some product/industry have a longer churn cycle even up to a year duration. 2. There is a difference between customer churn and revenue churn. Appropriate segmentation of customers is crucial, it should be done based on the relevancy to the north star metrics of that product. We must prioritise and pick those segment(s) which have high relevancy with the product north star metrics. 3. Asking the right open ended questions to the churned users is the key to unearth the real reasons. 4. Don't commit to assumptions, instead view them as hypotheses and use experiments to test them rigorously.

Don’t rush at implementing solutions. It is understandable that fixing higher churns comes with due urgency. But it is equally important to spend enough effort on understanding the underlying causes before rushing to execute.

Some additional considerations include: Competitive Analysis: Evaluate your competitors to identify areas where you can differentiate and improve. User Onboarding: Ensure a smooth onboarding process to help users understand and appreciate your product's value. Customer Education: Provide resources and training to help customers maximize the benefits of your product. Customer Feedback Loop: Create a continuous feedback loop to capture evolving customer preferences and needs. A/B Testing: Experiment with different retention strategies to find the most effective approaches. Continuous Improvement: Maintain a commitment to ongoing improvement and adaptation based on data and customer feedback.

The most significant factor we have to consider is external factors. For example, spending patterns generally spike during the Christmas season, and if you are in India, they spike during the Diwali festival. So, it is natural to see a high churn rate right after these big festivals. That's why I always recommend doing A/B testing with new strategies so that one can clearly attribute the rise/fall to the product strategy and not external factors."