It’s Better to Have Unhappy Subscription Customers Than Quiet Ones

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In the e-commerce and recurring billing business environment, it’s easy to assume a quiet customer is a happy one. This is especially true when the subscription environment is virtual, lacking face-to-face relationships. Many companies make the mistake of assuming that since a customer is not complaining, she is content with her subscription.

“We can’t take for granted that customers will always need us,” writes David Avrin in his book, Why Customers Leave (and How to Win Them Back). “They won’t. They can buy from anybody or nobody.”

In fact, a subscription business might take it to another level, hoping they don’t get any customer complaints at all. Complaining is bad, right?

Not exactly. Let me explain.

The dangerous ground of the quiet customer

An unhappy customer is one who isn’t going to stay loyal to your business. In fact, Lee Resources said that 91% of dissatisfied customers simply won’t do business with that company again. In the highly competitive world of e-commerce, there are almost always other options, and an unhappy customer is likely to take their business elsewhere.

Not only that, but a dissatisfied customer reaches out to an average of 15 people to talk about their problem.

However, it’s the quiet ones who are particularly problematic. While 67% of customers say they've churned, or stopped doing business with a company because of bad experiences, only 1 in 26 (less than 4%) ever complained about the issues.  

With that in mind, it should be easy to see the value in embracing unhappy customers and resolving issues. However, it’s far more difficult to ferret out a problem if a customer isn’t going to assert himself and voice it.

Bill Gates summed it up this way: “Your most unhappy customers are your greatest source of learning.”

Uncovering problems that have not been communicated

Exactly how does a business go about looking for problems, if a dissatisfied customer is keeping mum?

One way to head off communication issues is to build relationships. Establishing and maintaining relationships with customers is integral in the subscription business. Unlike traditional retail interaction, a relationship with the customer does not end when the sale is completed. In fact, with e-commerce, it should be the beginning of a partnership.

The customer lifecycle gives businesses ample opportunities to connect with customers. And when a customer knows a business cares about them, they are more apt to reach out with questions or concerns.

It’s also helpful to survey your customers to reveal hidden problems. Issues are not going to magically reveal themselves, particularly if a customer is not forthcoming. However, asking customers to participate in surveys provides a forum to communicate problems. Ask questions about why they started doing business with you, how happy they are with your products and features, and how you can improve your service.

If you get a lot of positive responses, great. But don’t start celebrating when you see boxes ticked in the top tiers, indicating good experiences. The work needs to focus on those ‘dissatisfied’ and ‘somewhat dissatisfied’ responses. Why are they unhappy?

Clues that may indicate potential churn

If a business can unlock the mystery of why customers are unhappy, there is a good chance they can recover the relationship before someone ends the customer lifecycle and churns. Estaben Kolsky, thinkJar founder, found that 67% of customers will remain with a company if an issue is identified and resolved.  

Still, it can be hard to know something is wrong without a customer complaint. Fortunately, there are some other warning signs you can look out for:

1. A large increase or reduction in support issues

Does your business track support tickets? This process should go beyond generating a ticket, and then closing it when the issue is resolved. It is also a good gauge of customer satisfaction. If a customer suddenly starts generating more support tickets than usual, there might be a problem with your product.

But, if a business used to generate 20 support tickets a month, and that suddenly falls to 2 or 3, don’t assume that this is a good thing. It could very well be that your customer is looking at a competitor to provide a better solution than you are providing.

Keep in mind that of 26 dissatisfied customers, only one will complain. The other 25 will likely look for another solution and churn out. There goes your MRR, or monthly recurring revenue, for that customer.

2. A customer comparing your product to a competitor

Even if a customer is not contacting your company to issue a complaint, they may mention a competitor in passing. For example, your company may provide a telematics solution, combining GPS devices with sensors in fleet vehicles. However, if a conversation with a customer reveals that a competitor can measure a component that you do not, you know that he’s been looking around.

Educate your customer service team to pick up on subtle mentions such as this so that you can be alerted to a potential problem.

3. Your customer referring to the terms of your contract

Every e-commerce and subscription business works under an agreement with the customer. If that customer contacts your business to ask questions about a contract, it’s time to take notice. It might be an obvious statement, such as “I read in my contract…,” but it could be more subtle.

For example, they may note that in their contract, they are permitted to generate 1 terabyte of data, but they generate ¼ of that amount. If they are looking at their contract and asking questions, there could be a problem.

4. Customers ignoring special deals

Awarding customers for their loyalty, such as offering a month of service for a reduced price, is a good way to thank them for doing business with you. However, if you offer a discount that they need to take action on, such as going online to check a ‘deal’ box, and they do not bother to take you up on the offer, there could be a problem.

5. Customers stopping communication

“No news is good news” quickly takes a subscription business down a slippery slope. If your business is in contact with a customer, and that customer suddenly seems to be unavailable all the time, she could be shifting her focus elsewhere, such as to a competitor.

Or, if your customer historically reaches out to your customer service team, and those calls suddenly drop off, it’s time to take action and initiate contact yourself. Kolsky’s findings revealed that 11% of churn can be prevented if a business simply reaches out.

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Preventing the quiet subscription customer churn

So, you’ve unearthed an unhappy customer. How do you fix what is broken and maintain a healthy relationship?

1. Ensure that your customer knows your product

Many times, customers feel unsettled when they do not know the product well enough, which can quickly transition into dissatisfaction. Nobody knows your product better than you. Although that’s a given, a business needs to keep in mind that this means the customer is not going to know all the ins and outs of your products, services, and features.

Generate in-app ‘tech touches’ to highlight features that a customer may not be aware of. This also helps increase the ‘stickiness’ of your product.

Webinars and comprehensive documentation are other ways to improve client satisfaction at scale.

2. Engage customers and keep communication open

As mentioned before, communication is essential. Reach out to your customers proactively and thank them for their continued loyalty, and invite questions or comments. This can be in the form of a low touch communication, through a simple email, or a high touch communication with a phone call. For instance, insurance companies will often initiate a call to go over other features and packages.

Businesses often identify customer needs and apply their CSM (customer success management) roles according to these goals. There are generally three CSM profiles:

  • The ‘bank teller’ CSM is on the front lines of customer service. They are more service-oriented, but don’t have much interaction with the decision-making side of the business.
  • The ‘business advisor’ CSM functions at a deeper level, helping customers improve metrics by identifying how they can best use your product.
  • The ‘sales-oriented’ CSM develops long-term relationships with large customers and often works with a sales quota and incentives to cross-sell or upsell.

Not only does CSM communication allow for cross-selling (selling additional products or features), it also opens the line of communication with a simple, “Is there anything I can help you with today?”

3. Examine your customers in groups based on common qualities

It’s a good idea to segment your customers into cohorts, or groupings based on similar values. This could be by purchase date, similar products, or geography. For example, when grouping customers by region, you can narrow down the most effective times to make contact with them.
You can also create an engagement model to determine how often you reach out to your customers. Segmenting customers helps direct that engagement model to maximize effectiveness. For example, the engagement model could include one or more of: on-site visits, quarterly customer success reviews, annual growth checks, or monthly best practices meetings. 

4. Offer different communication channels

Customers who prefer email may balk at having to call your company with a concern. Other ways to communicate are through social media sites, online chat availability, and webinars. 

When using social media, engage your customers by asking them to comment on a question, such as, “What feature could we offer to make our product better?” Keep in mind that customers who engage with businesses will spend between 20% to 40% more. Social engagement also helps make your product sticky and keeps customers happy.

5. Analyze customer behavior

As an example, you can generate reports to determine if a customer opens emails from you, or if they are immediately deleted. Are they spending a lot of time in the FAQ section on your website? If they’re searching for an answer, it might be time to reach out and offer assistance.

6. Ensure a cohesive business by encouraging communication between departments

Take steps to make sure your business is not broken into silos. If the departments in your business operate independently versus interdependently, essential information may not be conveyed about customer satisfaction. If, for instance, someone on your inside sales team speaks with a customer and senses confusion or dissatisfaction, that information needs to be conveyed to your customer service department.

7. Engage and entertain your customers

Entertained customers are engaged customers. For example, Commonwealth Bank in Australia created a game on their website called “Where’s my wallet?” In the game, there was a panoramic view of Sydney with wallets ‘hidden’ in the picture. Each wallet contained a $200 reward. Within the first 10 days, 43,000 unique visitors came to the site, spending an average of 12 minutes there.

In the subscription business world, a customer churning out creates a ripple effect of lost revenue. It’s bad enough for a retail store to miss out on selling one television to a dissatisfied customer, but imagine losing that sale every month. Cherish your happy customers, and provide solutions for unhappy ones.

Take proactive measures to uncover issues with the quiet customers and retain that recurring revenue.

Tags: SaaS Churn Customer Service

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