What to Do About Ghost Customers? 5 Tips for Successful Reactivation process.st/reactivate-ghost-customers December 6, 2021
Leks Drakos December 6, 2021 Customer Success, Tech & Startups
During the second world war, a young soldier from Lille attended a dance for servicemen about to be deployed. One woman caught his eye, and eventually, he worked up the nerve to ask her to dance. Thinking that he would ask again – as most of the other young men would – she politely declined. The young soldier was shy, though, and took her refusal at face value. Not knowing her name or if he would even return, the young soldier went off to war. Nearly a century later, their granddaughter – my very closest friend for all of three days – told me the story as we drove through the French countryside between Lille and Arras. We love stories like that – the romance of chance encounters, unintended separations, and reunions that could only be an act of fate. Maybe it’s having an answer to the so-often unanswered question What might have been? that’s the thing that really resonates. 1/9
Personally, I’m just really nosy and I like stories. While most of us have some variation of “a friend of a friend’s second cousin’s grandmother was reunited with her first love by total accident,” the truth is, we rarely experience these reconnections without some sort of deliberate effort by one or both parties. But we lose touch with people all the time. High school best friend. University mentor. Pickup game buddy. Customer whose payment didn’t go through and involuntarily canceled their subscription to your service because they didn’t realize it. Happens all the frickin time. But there is no missed connections column for lost customers. If you want them back, you’re going to have to be proactive. Fortunately, not only am I good with stories, but I’m pretty good at solving problems, too. (Or, at least, nagging our CS and Ops Team Manager, Blake Bailey, until he spills all his secrets.) Either way, in this Process Street post, I’ll share the 5 things you need to know to put some life back into those ghost customers haunting your MRR. Let’s reconnect!
The journey to passive customer churn
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Churn happens. Most companies are very good about addressing customer churn. You listen to your customers, you address their pain points, you offer incentives. Sometimes, they still leave. So you see if there was anything you could’ve done differently. Maybe there was – so next time you do – maybe it just wasn’t a good fit for the customer. When it comes to involuntary churn – or passive churn – companies tend to presume it’ll just take care of itself. The customer will realize they haven’t been charged for your service and reactivate on their own. Except they don’t. On average, SaaS companies lose about 9% of their MRR to passive churn. If you don’t get a handle on it, passive churn can completely derail your growth plan. Passive churn has a fairly predictable set of events – many of which can be avoided with the right foresight and preparation. But I’ll get to that.
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Thomas has subscribed to your service, and, overall, been happy with it. But then his company gets a new credit card and Thomas forgets to update the details for his subscription. Spoiler: Next payment fails. An automated notice goes out but gets rerouted to spam and Thomas never sees it. As far as he’s concerned, everything is working fine. The payment gets tried again. And it fails, again. Thomas is still oblivious. At the end of the subscription period, his team loses access. Obviously, they ask Thomas for an explanation. Thomas contacts your company’s CS, asking for an explanation. After some back and forth, your CS determines a failed payment is at fault. All Thomas has to do is update his account information and the subscription will be reactivated. By this time, Thomas and his team have switched to a competitor who’s guaranteed this won’t happen. Through a series of miscommunications and missed connections, you’ve just lost a customer that otherwise would have stuck with your company long-term.
5 ways to ward off ghosts
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Gaining new customers is hard work. We all know that. It takes a lot of time, effort, incentives, and attention to sway the modern consumer to take a chance on a new company or service. So, having put all the effort into wooing them, are you really going to let them walk out of your life forever because you didn’t keep the romance alive? A bird in the hand is worth two in the bush, as they say, and an existing customer is 70% more likely to make additional purchases from your company. You don’t want to mess that up by losing a customer who doesn’t even want to be lost. What to do in this situation? To answer that question, I talked to Blake Baily, Process Street’s Manager of Customer Success Content and Operations Team, who knows a thing or two about keeping customer hearts beating.
Don’t let it happen in the first place Blake Bailey’s ghost tip #1:
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“Once a customer ghosts, it is a lot harder to get them back versus if you’d kept them engaged and active. Focus your efforts there first, and then focus on reactivations. A strong onboarding can prevent most issues.”
Identify the root cause Blake Bailey’s ghost tip #2: “This could be a lack of usage, distaste in the product, a bad fit, or external issues like a failing business. Address each point to the best of your ability, but understand there are some situations you cannot overcome, and instead focus on ones you can actually affect.”
Identify early warning signs of customers ghosting Blake Bailey’s ghost tip #3: “Good examples are periods of not logging in, decreased activity inside of the app, or even the tone of support requests. By identifying these markers, you can create alerts and even automate the process of reaching out early and often to keep customers engaged.”
Use a personal touch to retain high-value customers Blake Bailey’s ghost tip #4: “This may include emailing them to congratulate them on a recent success, adding them on LinkedIn, calling them up, or even asking to take them out to lunch. The personal touch can sometimes break down the barriers and get them to engage once again.”
Automate polite – but firm – payment reminders Blake Bailey’s ghost tip #5: “After several failed attempts, send a personal note to see if you can help. By having a computer take care of this, the customer will feel less awkward about a failed payment. If it gets to the level of needing a personal touch, do so only in a helpful tone, never accusatory.”
Ghost customer resurrection plan Despite all your best efforts, you’ve still got a few ghosts hanging around your customer accounts. Fear not: All hope is not lost. By utilizing the following resurrection plan, you can successfully reactivate most of your ghost customers. Before implementing the plan, however, you need to ask yourself one very important question:
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Is it worth it? Basically, is there a high probability that this customer will stay active afterward, or are they more likely to churn again? Pay attention to their activity prior to their involuntary churn to assess whether or not there’s a benefit in reactivating their account. How often are they actively using your service? Has their communication dropped off or changed tone? You don’t want to expend resources reactivating the same customer over and over when you could devote those resources to your active customers. On an individual level, churn is not always something that needs to be corrected. If you decide to win this particular customer back, then simply follow these steps:
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Identify your ghosts You need to know who your ghost customers are before you can do anything about them. Design a system or process that can quickly identify who your inactive customers are so you can take action sooner rather than later.
Determine the cause As Blake mentioned, there could be a number of reasons a customer churns. You need to be sure of the cause in each situation before deciding your approach. You’re definitely not going to win anyone back if you don’t understand their reasons for leaving in the first place.
Segment customer types Segment your customers into groups. Separate them by cause, size, value, and other relevant factors so you can create specialized plans for approaching them.
Minimize reasons for inactivity Once you know why a customer becomes inactive, then you can reduce the reasons for their inactivity. Perhaps their onboarding wasn’t thorough enough or you don’t currently offer the features they’re looking for. Maybe it’s just a simple breakdown in communication. Whatever the reason, figure out how to eliminate it to reduce the chances your customer will become inactive again in the future.
Automate communication Obviously, you need to use this tactic in moderation. You don’t want to overwhelm your customers with automated and irrelevant messages, but the appropriate outreach plan can draw your customers back. Send out notifications when you develop new features, services, or products. Highlight particular offers for existing customers, or incentives for reactivating. If you’ve made changes to your offerings since the customer became inactive, be sure to let them know about your improvements and milestones.
Incentivize giving feedback If you still haven’t convinced your customers to reactivate, find out why. Offer incentives to gain feedback from your customers on why they left or allowed their accounts to be deactivated. The more information you have about your customers and their needs, the better equipped you will be to meet their needs in the future, prevent passive churn from happening, and reconnect with those you’ve lost contact with. 8/9
Reactivate The final goal is reactivation. Naturally, you want to make sure reactivation is in the best interest of both your customer and your company, but all things being equal, successful reactivation should be achievable. Once you reactivate their account, however, you need to make sure they don’t become inactive again. Keep up the personalized touches and be sure to check in with them regularly in order to maintain that relationship. For an in-depth look at optimizing your customer success teams, check out this webinar with Process Street’s VP of CS, Jason MacMurray (aka Blake Bailey’s boss), and Jay Nathan, Chief Customer Officer at Higher Logic:
Banishing your ghosts You could throw a message in a bottle out to sea and hope that in 70 years someone tracks down your customer’s great-niece and passes it on, but why would you? With a little attention, a dash of automation, and some solid customer success strategies, you can keep your hard-won customers from becoming ghosts at all.
“Remember, this is your customer and you are not the mafia.”
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