In the previous two parts of this User State blog, we’ve explored how anonymous users move to known and how these users then move from known to customer. Once we’ve navigated this path though, what are some of the states of a customer. How can we ensure that our users are active, enjoying and getting value from the product, service or information and how can we ensure that they don’t churn? This is what we’re going to explore in this latest and last part of this extended blog.
Firstly, what’s an active user?
This can differ for each company, however, typically this is a user that is getting value from the product. They’re logging in, using the service on a daily or weekly basis, they’re the kind of users we all want! They are not a churn candidate, but are going to hopefully bring an increased lifetime value (find out more about Lifetime Value with one of the globe’s leading experts, Julian Thorne - who I interviewed for our Podcast - https://www.zephr.com/podcast-ltv-julian-thorne). We don’t tend to worry about active users, but do remember that these are the people that are probably going to be referring you to friends and family, driving extra revenue - make sure these are still a ‘loved’ segment, as the incremental value they can bring can be VERY useful.
So, flip that, what’s an inactive user? This is someone that has signed up or subscribed to your product but is very inactive, maybe for a length of time, and therefore a high churn candidate. This is not the only key factor in being a churn candidate, but ensuring that your customers are getting value and actively using your product is probably a good place to start.
Why do we not want customers to churn? I guess this is quite self explanatory, however, for newbie’s: churn, most commonly expressed as a percentage, is the number of customers or subscribers that discontinue their payment, relationship, subscription and contract. Therefore, a lost customer. This means there is a loss of revenue. Just to note, there’s two types of churn, revenue churn (percentage or revenue lost from existing customers in a certain time period) and customer churn (how many customers cancelled their subscription in a certain time period).
So what do we actually want to do? We want to ensure our customers renew their subscriptions and payments to roll over either monthly or annually as an active user, getting value from our product or service. Renewal is the process of continuing your subscription or access into the next billing cycle.
The key to ensuring you have personalised experiences beyond sign-up and becoming a customer ensures you are taking steps in the right direction to reducing your churn rates. By targeting both active and inactive users, leveraging a great customer success experience and ensuring your product, service or content is providing value to your customers, you will be in good health when it comes to managing your renewal and churn predictions.
Again though, this is a fast and agile process that needs testing. What way is better to re-engage my users? Is it a triggered email? Is it an ad targeted to them as a segment? Is it a push notification? All of these are just some ways in which may be a good way to ensure engagement and leveraging the service as an active user.
Net net, data driven customer journeys, personalised experiences and frictionless processes go a long way in terms of moving users through different states, increasing conversion rates and increasing customer engagement.
There are lots of open questions, and things we’re going to explore going forward with these conversations. This is just some of the things we’re solving here at Zephr.
Thank you for reading this three part blog on user states, I hope it encourages you to think about your customers in this way, and help you plan out your subscription business in more detail. To discuss this in more detail, please do not hesitate to contact us - firstname.lastname@example.org
Zephr is the world's leading dynamic customer journey orchestration platform, enabling you to build frictionless subscription experiences.
- Deploy - Slot our SaaS product seamlessly into your existing technology stack in weeks not months
- Design - Create registration or subscription strategies that are informed by first-party data
- Develop - Experiment with deeply personalised customer journeys that improve conversion rates
- Deliver - Achieve best-in-class business outcomes and more valuable customer relationships