6%CustomerCohorts

26%Customer

Only

23%Revenue

Only

45%Revenue

& Customer

Customer Success professionalsknow how important it is todiagnose churn. Their daily jobis to find at-risk customers andhelp get them back on track.

DIAGNOSING CHURN

MONITORING CHURN

REDUCING CHURN

WHAT TO INCLUDE IN YOUR CHURN CALCULATION:

58% 59% 62% 63% 66%Up-Sells Cross-Sells Upgrades Downgrades Down-sells

WE CAN HELP

“The recurring revenue and services market is extremely competitive - multiple product offerings allow for easy switching.”

Expectations not met

No longer need productSeek lower cost alternativePoor service/support

Choose competitor

Champion leaves company

Cutbacks or out of business

Lost through acquisition

Top 8 Causes of Churn

39% say the #1 reason forchurn is not meeting expectations

Notes:

What are thebest ways to measure churn? What causeschurn and whatcan you do toincrease retention?

How should you track churn? Every company manages churn differently. Pick a few measurements that make sense at the board and executive level and start monitoring what’s happening to your customer base.

The majority of recurring revenue businesses track churn byboth revenue and customers.

Companies that only track churn by the number of companies lost in a given time period will have an incomplete picture of churn.

The best companies monitor churn by revenue, user count, type and size of company, and the duration of the customer relationship.

Most companies consider these “customer health” measurements when calculating customer churn. Down-sells (how frequently your customers pay less for the exact same product) are the most common. Tracking the growth from up-sells and cross-sells is equally important - existing customers can often exceed the growth from new customers.

What are the most effectiveways to reduce customer churn?

U A

Early identification of at-risk customers will give you the opportunity to save them. Apply technology to increase efficiency andautomate the manual process.

Unless you understand whycustomers churn, it will be difficult to focus on what to change in order to increase retention.

Have an honest conversation with lost customersand study their usage patterns to identify factorsthat increase the likelihood of churn.

Make sure customers move upthe adoption curve and alert your team when feature usage is low.

Compare churncalculations toforecasts and makesure you’re on track.

Who keeps track of churn?

The goal of a Customer Success organization is to deliver value to your customer base.

The objectives you measure should be specific to the pain your company is facing (retention, loyalty, churn, revenue protection, customer engagement, etc). Every company has different Customer Success needs based on their history, growth stage, philosophy, and prior investments in Customer Success.

Compare churncalculations to

forecasts and makesure you’re on track.

GAIN SIGHT

IDENTIFY: Identify at-risk customers early1

MEASURE: Measure product usage and adoption2

ANALYZE: Thorough analysis of churned customers3

SURVEY: Survey existing customers to find problems4

“Some customers lack visibility into the value of their investment.”

90%Annually

81%Quarterly

76%Monthly

45%Weekly

39%Daily

What period of time do companies use when calculating churn?

ONLY34%

can calculate customer churn for ALL time periods

MEASURING SUCCESSMEASURING SUCCESS

WHAT ARE YOU TELLING ME?

What term should you use to describe customer success?

Reducing churn will:- Increase the recurring revenue per customer- Maximize customer lifetime value- Increase the return on customer acquisition costs- Strengthen customer loyalty- Build your reference pool

of companies with a Customer Success team consider "Increased Recurring Revenue per Customer" as a Top 3 benefit of reduced churn.

86%

SHARE: Share customer risk info across company5

Companies with a dedicated Customer Success team see a 24% lower churn rate than companies without Customer Success.

24%

CustomerRetention

41%

CustomerLoyalty

26%

CustomerChurn

18%Revenue

Protection

4%

RetentionRate

11%

SOURCE: “Impact of Customer Churn: A Research Survey Conducted by Gainsight.” Q3 2013. © GAINSIGHT INC. ALL RIGHTS RESERVED.

The two least compelling benefits of a reduced churn rate are increased customer loyalty (13%) and a growing reference pool (8%).

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