Churn management is part of customer relationship management (CRM). It aims to prevent customers from leaving and to reduce the churn rate. A key aspect of churn management is identifying customers who may be considering leaving and determining the possible reasons for their departure. Online surveys are particularly useful for this purpose, as they can be used to examine customer satisfaction or dissatisfaction and customers’ willingness to recommend a company. Online surveys therefore provide companies with an effective way to monitor customer churn and its warning signs and take action as part of their churn management strategy.
Table of Contents
What is churn management?
Churn management refers to all the efforts and activities undertaken by a company to prevent customer churn. Customer churn means that customers stop buying a company’s products or services or no longer interact with the company. Churn may be contract-based, when a customer explicitly cancels a contract or subscription. Another form of customer churn occurs in transaction-based relationships, when customers stop using or buying a product without having a contract or subscription.
Churn management therefore aims to prevent both forms of customer churn, identify possible causes and introduce measures to address them. Its primary objective is to minimise the churn rate.
LamaPoll makes it easy to collect customer feedback – both proactively, to measure customer satisfaction or dissatisfaction that could lead to churn, and retrospectively, to identify the reasons why customers have already left.
Churn management using customer satisfaction surveys
To prevent customer churn, companies need to identify indicators that customers may be likely to leave. Regular customer satisfaction surveys in the form of short pulse surveys help companies understand how satisfied their customers are. Scale questions can capture responses ranging from “very satisfied” to “very dissatisfied” in relation to product quality, customer service and staff. If a customer satisfaction survey receives many “dissatisfied” or “very dissatisfied” responses, some of the respondents may be at risk of leaving.
Our online survey tool can be used to conduct customer satisfaction surveys that display follow-up questions only to customers who may be at risk of leaving. These questions can ask why they are dissatisfied, giving companies the feedback they need to take measures to prevent churn.
To measure customer satisfaction reliably and obtain meaningful results, it is advisable to use established methods. Find out more about relevant metrics and methods here: Established methods for measuring customer satisfaction
Net Promoter Score (NPS) as part of churn management
Alongside customer satisfaction feedback, the Net Promoter Score (NPS) plays a central role in identifying signs of customer churn. The NPS measures how willing customers are to recommend a company and provides information about three customer groups: promoters, detractors and passives. The risk of customer churn is higher when the NPS shows a decline in promoters and an increase in detractors and passives.
To provide meaningful insights, the Net Promoter Score should be measured continuously so that changes over time can be identified. This allows negative trends to be detected early and addressed promptly. It also enables companies to measure how changing market conditions, optimisation measures, restructuring and marketing activities affect their Net Promoter Score.
A sustained decline in the Net Promoter Score is a clear warning sign of customer churn and should be investigated.
You can use our NPS questionnaire template as a starting point. It is available free of charge and can be customised to match your corporate design once copied to your LamaPoll account.
Preventing customer churn through excellent customer service
Companies that observe a declining NPS over a longer period should act quickly to counter the trend by taking steps to improve customer retention. Customer service is one important area to address. Excellent customer service, with fast response times, high availability and a friendly manner, strengthens customer loyalty. Customers are more likely to stay with a company whose support team resolves their problems quickly and takes complaints seriously, even when a situation has not gone entirely to plan.
If customers in a difficult situation feel that customer service is there for them and receive a sincere apology, the resulting bond may prevent them from leaving. It is therefore worth investing in customer service at all times. Online surveys allow companies to find out how their service is rated and perceived and then take appropriate steps to improve it.
We have two survey templates for evaluating customer support: Customer support feedback and Customer service evaluation. You can use them free of charge in your account and customise them to your needs.
Churn management examples and tips
To prevent cancellations and customer churn, companies should take proactive churn management measures to counter negative developments. They can improve their customer service and regularly optimise their product or service in line with customer needs. Online forms and surveys can be used to capture customers’ wishes and expectations. Companies should also monitor customer satisfaction and willingness to recommend on a regular basis. Churn management measures designed to prevent customers from leaving include:
- conducting regular customer satisfaction surveys to gauge customer sentiment and identify dissatisfaction;
- optimising the product or service in line with customer needs;
- maintaining consistently high standards of customer service to build customer loyalty and retention; and
- preventing churn by monitoring the NPS regularly.
Customer churn questionnaire as part of churn management
When customers do leave, there may be a range of reasons. These can be divided into competitive, company-related and customer-related reasons. Customer-related reasons, such as moving to a new location, lie outside the company’s control. It is particularly important for a company to determine whether customers left for competitive reasons, such as a better price-performance ratio offered by a direct competitor, or for company-related reasons, such as poor customer service. These findings can inform marketing and sales measures designed to prevent future customer losses.
When a company experiences customer churn, for example through contract cancellations, it should not simply accept this without taking action. Identifying the reasons why customers left can reveal what should be improved or optimised in future. LamaPoll can be used to create concise exit questionnaires focused on one key question: “Why are you leaving us?”
Use our free Customer Churn Feedback survey template, which you can copy to your account and customise to your needs.
Churn management is closely linked to customer satisfaction. Find an overview here: Methods for measuring customer satisfaction
