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How Intercom.io Reduces Churn Through Email Automation Based On Team Behavior

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Intercom.io’s Des Traynor argues that not all churn is equal, and that cancellation is the final straw in a process that begins much earlier. Thus, Intercom.io’s automated emails focus on re-engaging entire teams whose interaction is lagging.

The Research

Traynor identifies “Activity Churn” as a phenomenon that occurs prior to cancellation, as depicted in the chart below:
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Before cancellation ever happens, there are clear signals that a customer is in danger of churning. Engagement flags, and your product or service goes from an everyday occurrence to being used once a week, then once a month. Finally, they decide it’s a waste of money altogether.

The Execution

Rather than sending an automated email to every user who hasn’t logged in for a set number of days, Des suggests that the best time to address activity churn is when you see a drop in usage across an entire team—an indication that your service is losing its value.
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Many SaaS products are built around teams. Think project management (eg. Basecamp and Mavenlink) or accounting software (eg. Quickbooks and Xero). As the image above depicts, an individual customer might be on holiday or working on different projects, therefore their usage will temporarily stall.
But when an entire team, whether it’s a group of three or 300, begins to noticeably drop, action must be taken.

Why Did This Happen?

When companies measure churn based on cancellation alone, they miss the opportunity to reengage the once-a-week user who, unlike the cancelled user, can still be retained. Even when users insist on leaving, it’s possible to gain insight into their objections and craft a better service that ultimately lowers churn in the long run.
The key is understanding that churn happens long before customers decide to cancel.

Actionable Advice

Understand the difference between someone who didn’t convert after a free trial and someone who has been active for a year before slowly disengaging. They have different relationships with your business, and sending the same email to these two customers would be a huge misstep. Automatic “Dear Customer, We miss you!” emails will seem disingenuine to long-time users who are experiencing serious issues with your service.
For long time customers, define the metrics that indicate a drop in engagement. Check your analytics to find the common patterns of churned customers & schedule the intervention when they can be considered “disengaged”.
If your product revolves around team usage, find ways to bucket their usage together and measure that over time. Teams are less likely to churn if they are happy with your product because of the costs to move to another software solution.
Give customers a reason to log back in by offering a sneak peek of a new service or a reminder of features they’ve found valuable in the past.
Accept that you will not be able to retain or re-engage every customer, and it will only hurt your reputation to fight back or spam them for months after cancellation.

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