How to stop a customer cancellation

customer cancellation

It’s a moment every Customer Success Manager dreads- you just received an email from a customer requesting to cancel their contract. Don’t panic, there are a few ways you can still potentially prevent this customer cancellation.

Don’t get backed into a corner

Instinctively you might be willing to do just about anything to save this customer. But it’s important to pause, take a step back, and consider if they are trying to back you into a corner. In my experience, certain types of customers use the threat of cancelling as a technique to renegotiate their contract from a position of power. Their goal is to put your company on the defensive or to present you with some kind of ultimatum. Don’t fall into this trap. One strategy for putting your company on the defensive is to wage some kind of attack- they suddenly proclaim that your product is missing a key feature, the Support team is too slow to respond, and so on. The CSM working on this account should be aware of any ongoing concerns that line up with these complaints. It’s also the CSMs responsibility to track the value this customer has received from your product, and they should be ready to cite hard numbers that can constructively bring an adversarial customer back to the facts, and away from the bad vibes.

Show empathy and demonstrate value

Every customer who requests to cancel has one (or more) underlying pain points when it comes to your relationship. For that reason, the two most powerful tools you have in your toolbox to circumvent a customer cancellation are empathy and demonstrating value. Why is empathy so important? The majority of customers who are considering cancelling want to be reassured that you hear and understand their problems. They want to know that things are going to get better, whether that’s in the form of faster support response times or releasing a feature they really want built. Listening and empathizing with their concerns can do wonders to strengthen the relationship and build the credibility necessary to save their business. The second strategy (hopefully used in tangent with the first) is to effectively demonstrate the value your product has delivered to the customer. CSMs should be constantly looking for opportunities to tie the value of their product to hard numbers: an advertising analytics product increased conversion rates by 10% which resulted in an additional $120k ARR; a HR product increased employee retention by 5% decreased staffing and recruiting costs by $50k; and so on. Being able to make a case for why their product is worth sticking with (or what they stand to lose by cancelling) puts CSMs on more solid footing during a contract negotiation or cancellation request.

That being said, not all customers should be saved. “Bad Fit” customers are those who neither receive value from your product immediately, nor realistically will in the future. Deciding to part ways with a Bad Fit customer allows your company to focus their efforts on customers that are more likely to be successful in the long-term.

Uncover critical feedback

CSMs should contact every customer who has canceled, or requested to cancel, to solicit feedback. People are generally more honest and candid when they have already made the decision to leave. Don’t approach this call ad hoc- create a customer cancellation process and a standard list of questions to discuss during this feedback call. This is an opportunity to collect insights to share with all customer-facing teams, so don’t forget to dig into how each department could have better served this customer. Finally, grouping customer cancellation into a few categories allows your executive team to track churn trends over time.