How unfortunate is it to see a subscriber canceling their recurring payment! That’s pretty much a reaction to what slipped through your hands. You could have easily avoided such a situation if you knew that was the subscriber’s next move in the gameplay. And you’d do some quick play to stop it! That seems like a hypothesis, but it’s possible in reality. That can be done through product analytics.
What is Product Analytics?
Product analytics is the process of evaluating how your customers or users engage with your product. This enables your product team to identify and track engagement data and optimize the product. It, ultimately, helps customer success managers to drive product adoption among the users.
Product analytics enables you to track, visualize and evaluate real-time customer engagement and behavioral data. It lets you go beyond those vanity metrics and tie the data back at every step of the customer journey.
How does product analytics work?
It tracks the user’s interactions with your product. It includes checking the clicks, swipes, page views, and all the navigational elements resulting in gathering information useful to perform different types of analysis.
- Conversion analysis
- Churn analysis
- Attribution analysis
- Retention analysis
- Funnel analysis
Amongst all the types of analysis one may carry out using product analytics, our point of discussion would be churn analysis in this blog.
Why is it not easier to predict churn?
Churn isn’t always easy to predict or calculate, especially because it’s calculated using historical data. Nothing is definite in the future, even if it resembles the past. Unexpected developments can invalidate previous models and cause businesses to make terrible mistakes. Your team can easily overlook the impact of the interactions that customers have with the product.
Yet, predicting and controlling churn becomes easier with product analytics as it tracks these interactions and helps you identify the signals that might cause churn.
How does product analytics help in reducing churn?
The term churn tells about the subscribers who are abandoning your product. If you hear “Customer X churned”, you know that they stopped using the product for some or the other reason.
The purpose of churn analysis is to derive the insights from the customers who left your product to come back with the strategy to retain all those who would later on. Until you know the reason behind it, you just can’t be at peace!
Here’s how product analytics can help in reducing churn with data that not only gives insights but proactive alerts as well.
Help in improving Customer Engagement
You need to look at the customer journey to understand how customers engage with your product. It’s important for you to see how they interact with your product and perform a particular function.
Product analytics helps you assess engagement accurately by identifying which interactions bring out the most value. The insights, subsequently, help you improve customer engagement by making the product stickier.
Track and Measure Metrics and KPIs
Product analytics helps in tracking data that is absolutely essential for analyzing churn risks. It will help the customer success team to define KPIs and metrics vital to your customer’s business.
Data like churn rate, customer health score, customer engagement rate, retention rate, etc. are crucial to see how customers are using your product. Thus, these data help in identifying churn risks proactively.
Analyze the drop-off stage
This is very crucial to understanding the next question: why did they churn. Analyze where they go inactive and see what they do before going inactive. That connects you to specifics somehow! On the contrary track, what are active users doing, figure a way to pull the churning customers from falling! The drop-offs are proactively giving signals of their inactiveness.
Customer retention saves a SaaS firm from sinking. So, it’s a no-brainer that you must focus on retaining customers before they think of churning. To do this, you must have accurate information about how customers feel about your product.
This information comes from product analytics. Understand that every business model is different. Uncover the best way to measure retention with the help of product analytics. Put in place some well-defined parameters to analyze churn risks and plan strategies to improve retention over time.
Focus on the customers with the highest LTV. Product analytics will help you track the journey of these customers with your product. Thereby, helping you to recognize a pattern in various interactions such as using certain features, achieving milestones, etc. Understand their behavior thoroughly.
Take insights from the journey and be proactive with new customers. A slight nudge from your end will help them take the right steps at the right time. Also, you can improve free trials, increase conversions, etc. which will help you in the revenue growth.
The common reasons for churn…
The poor Customer Onboarding process
Did you know that most SaaS companies lose their new customers within the first week of their association? This happens because of a poor onboarding process. An efficient customer onboarding process will help customers understand your product and realize value from it. The process makes sure that the customers engage with the product and use it for as long as possible.
On the other hand, the lack of a well-defined onboarding process only leads to frustration. This creates friction between you and your customers which, of course, becomes the prime reason for the churn.
The feature they expect isn’t in the product
A product isn’t fully developed at any stage with the growing customer needs. And this is a usual reason to come across. Although significantly it is impossible to come up with every feature the customers ask for. To find the priority amongst the features, check the number of requests for each feature, secondly, analyze, if created, will the ROI be increased. If the requests are high add this in the pipeline to request the product developers to include it.
Business that fails
Nobody knows what happens at any moment in time. If the company falls then it falls. But how can we prevent it? By targeting the right customers who are doing great in the market and are stable. They must be your focus while acquiring to avoid churn due to these reasons.
Drop-offs during trial
One decides to trial but doesn’t decide to explore. This may happen because the journey mapping in the trial period isn’t done well. And instead of giving a thought to exploring, they divert when they don’t see what they want/ Hence the mapping in the trial period must be taken seriously to direct them to value somehow.
Determining churn has become “The thing” for every SaaS business out there. As subscribers are paying recurrently, it’s hard to pace up with their changing needs and the company might fall into losses if the churn rate is higher than the retention rate. On the other end, it’s the only way of staying in the market with a subscription model for the product owners. And satisfying customers is the biggest challenge they undertake!
Although upselling is one of the ways to overcome churn, proactively monitoring product usage is the way to prevent churn. And it is equally needed to prevent the retained customers from abandoning you.