When a shepherd sees a lamb caught in a thicket or spies a few sheep wandering off, what does he do?
Does the shepherd let them go? Does he look at the rest of the flock and think, no big deal, I still have plenty of sheep? No, the shepherd thinks “I must rescue that sheep. I must keep everyone in the flock.”
Successful software companies view their customers the same way as the shepherd views his sheep. Every customer counts.
Customers are expensive to acquire. Revenue accrues slowly month-by-month.
Customers who stay with you for a long time are profitable and are your best sources of referrals. Therefore software companies work to keep customers as long as possible.
This makes cancellations and churn the bane of software companies. They know that the difference between a 3% monthly churn rate and 1.5% churn rate is the difference between failure and success.
What can you do to reduce your churn rates?
You’ve spent time and resources to acquire customers who will try your software. But just because they show enough interest to sign up for the free trial does not mean that they will fully engage.
In fact, 40%-60% of your customers will never come back after their initial use of the trial. Shocking, right?
What get’s in their way? Why don’t they come back? For some, they realize that it’s not what they need.
But for most, if you were to ask them, they would tell you “I forgot” or “I got busy.”
If you simply sent these customers an email, you would see a burst of activity and conversions to purchase.
A little encouragement and education will go a long way toward increasing your activations.
What kind of email should I send?
If you see that a user is not having a happy time with your software, send them a friendly, non-confrontational email. Send the email from a real person, preferably the CEO of your company.
Trigger the email to be sent if certain criteria are met. For example, customers who logged in below a certain number of times, who executed a low number of transactions, or who did not import data from another application.
Simply ask them to start using the software. Provide a link directly into their account.
Your experience with other customers has told you where people are most likely to have problems getting started with your software. Offer to help them. You can point them to tutorials they can use. Or you can offer to help them directly over email.
Give customers the opportunity to talk to you directly. Invite them to send you an email with questions. You cannot talk to too many customers.
These emails are all automated. Once you put them in place, they cost very little to maintain. But email can have a powerful impact on your business. These methods will lower your churn, improve your profitability and support your long-term growth.
Like the shepherd in the mountains who learns to watch over every stray, reaching out to customers will keep more and more of them in the fold.
Photo Credit: Madeleine Holland