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What is Churn Prevention?

churn pre - ven - tion
noun
Is a business strategy for keeping customers and averting their departure. A dynamic churn prevention plan can guide a business through the process of fighting against a potential churn before it occurs, and help keep customers happy. This strategy consists in analyzing the reasons behind churn and creating a combat plan that will minimize the churn rate. Reasons for churn are split into two main categories: voluntary and involuntary.
About Voluntary and Involuntary Churn

Voluntary churn happens when a customer decides to end the relationship and stops using a product or service, downgrades from a paid version, or switches to a lower paid version. Preventing voluntary churn requires the right combination of product engagement, customer experience, and perceived value. If customers don’t use your product often, or don’t have a good experience when they do, or don’t see value in your product, they won’t stick with you. This holds true whether you’re talking about free trial users considering a paid upgrade or paying customers deciding whether to renew.

Targeting the right customers to start with, analyzing user engagement and behavior, constantly optimizing your product, and communicating with your clients in an optimal way are solid tactics to prevent churn.

Regardless, some customers will still want to churn, and additional churn prevention tools can be employed to curb churn even further. Voluntary churn prevention tools include discounts during the churn process to entice price-sensitive subscribers to stay.

Specifically, for subscriptions, offering customers the option to pause their subscriptions instead of cancelling is another good tactic to prevent voluntary churn. Extending the subscription duration or asking subscribers to (re-)enable automatic renewal also reduces the chance of them churning. Allow subscribers to downgrade to less expensive plans that are not as rich in functionality is another way to prevent voluntary churn.

Involuntary churn happens when the use of products or services provided by the merchant is discontinued for reasons independent of the customer. One of the biggest and most recoverable causes of lost recurring revenue is failed payment authorizations. The most successful retention strategies combine several tactics simultaneously, together with advanced tracking and analytical tools to monitor and optimize results.

Involuntary churn prevention tools include: multi-currency management, intelligent payment routing, dynamic 3D secure, account updater services for expired cards, retry logic and dunning for hard decline handling.

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