By Jeremy Gillespie
I’m sure you’re familiar with the phrase, “paralysis by analysis.” When humans approach a complex problem they have a tendency to be overwhelmed and over-analyze, which stops them in their tracks on the way to a solution. Companies often fall into this pattern when it comes to solving their churn problems. Churn is complex.
Do you remember your middle school science class? Your teacher covered a simple and replicable process to approach scientific problems. It’s called the scientific method. This easy-to-follow method is your step-by-step, churn-destroying solution.
Step 1: Question Everything
This is a team activity. Get some popcorn, thinking caps and get to work. Start with broad questions, but work towards specific questions that get to the root of your churn problem. Consider retention in terms of why, what, how and when questions and don't contain your questions to customer success activities. Really try to figure out where in the customer lifecycle the churn seed is planted. Some example questions might be:
- When are customers churning (time, event, seasonality)?
- What impact is on-boarding having on retention?
- Are we selling to the right target audience?
Once you have questions, go through them and remove duplicates or join interconnected questions. Then put them into buckets based on where they fall in the customer lifecycle. This will give you a place to start the next step.
Step 2: Research
It can be tempting to take your questions, form quick opinions and skip research. Reserve those opinions and let the data do the talking. Take your final list of questions, order them by bucket size and start your research. Leverage resources in other departments to help you gather data and feedback.
After your research is done, refine your list based on results. If there are questions that are unanswered because data is inconclusive, save these questions for more analysis at a later date. Don’t allow unanswered questions to slow you down at this point. Now that you have your final list, move on to Step 3.
Step 3: Hypothesize Solutions
Forming a hypothesis is not about having an opinion on what is causing churn that was done in step one. You must take your informed question and develop a hypothesis for how you’re going to solve the problem. This is where you turn your ideas into actionable tests. The tests can range from large to small. Do not force yourself into only big tests, you can start small and move to larger tests once your hypotheses are proved out.
Next, you’ll want to prioritize these tests. The main criteria you’ll want to estimate is the impact this test will have on your churn goal. It’s great to use existing data to inform your impact estimates. I’m a fan of using the ICE Score to prioritize tests. To calculate your ICE Score you must ask yourself three questions for each test and answer them on a 1-10 scale.
- If successful, how large will the impact be?
- How confident am I that this test will work?
- How easy will this test be to run? (time/money/effort)
Sum these up, divide by three and you’ll have your ICE Score for that particular test. This will give you a quick way to prioritize your hypotheses and get on the fun in step four.
Step 4: Experiment
At this step you’re turning this method into action. Your approach should be to get the minimal viable test out the door quickly and analyze your results. The most important part of this step is gathering analytics on each test. Good data will allow you to accurately measure the impact and determine success or failure.
Two questions you should ask yourself once you’ve analyzed the data are:
- What’s the impact of the test?
- Was our hypothesis accurate?
It’s critical to ask yourself the second question. This will not only allow you to understand why something succeeded or failed, but it will also inform future tests. Often you find a future solution in a failed experiment.
Step 5: Record, Refine, Repeat
This is the last step. At the point you’ve answered the two questions from step four, you need to:
- Record your results – determine whether this test was a pass or fail and why. Make sure to document data for future reference.
- Refine – if your test was a failure, determine why it failed and create a new hypothesis. Even if your test succeeded, look into how you might be able to improve.
- Repeat – Using the two steps above, ask yourself what you should test next and continue the process.
You won't find a single silver bullet that kills churn. The solution is cumulative and takes an iterative process to determine what works and what doesn’t. And who would have thought a process you learned in middle school would be the key.
Need help figuring out where your churn is coming from? The Success League is a consulting firm that works with executives who want to unlock the retention and revenue a top performing customer success team will bring to their business. We transform support into success by building metrics, goals and processes that enable customer success teams to perform at their peak. www.TheSuccessLeague.io
Jeremy Gillespie - Jeremy is a growth-oriented marketing geek, technology enthusiast and customer evangelist. He loves using complex data to build creative retention solutions. By leveraging technology, Jeremy excels at creating scalable retention marketing programs. He works for LinkedIn, holds a BA in Communication from the University of Pittsburgh and MBA from Point Park University. He is a proud former Pittsburgher, but currently lives in San Francisco, CA.