Analysing net cash flow loss by cancellation reason

Note: Segmentation is available on all plans except the STARTER and ESSENTIAL plans. More details.

Customers cancel subscriptions for many reasons. Using Segmentation in ChartMogul, you can find and compare the cancellation reasons that have the biggest impact on your cash flow.

 

Capturing cancellation reason data

There's really only one realiable method for collecting cancellation reasons: Asking the customer.

When a customer cancels their subscription, ask them why they cancelled. You can do this by providing a selection of pre-defined cancellations reasons, or an open message box for a general reason. It's also possible to do an 'exit interview' with cancelled customers by reaching out to them directly. This is clearly a higher-effort approach and doesn't scale so well, but can produce higher quality qualitative data.

 

Pushing the data to ChartMogul

When you collect a customer's subscription cancellation reason, you should add this as a custom attribute to the customer in ChartMogul.

You can add a cancellation reason to your customers:

In the example below, cancellation reasons were added to customers using the Google Sheets integration:

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The attributes are then displayed in the customer's profile in ChartMogul:

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Setting up segments to compare

Once you have added cancellation reasons to your customers, you can compare the cash flow impact of each cancellation reason in ChartMogul,

  1. Log in to your ChartMogul account and navigate to the Net Cash Flow chart.
  2. Click Add filter and choose Cancellation reason - is and select a cancellation reason, according to those you pushed to ChartMogul earlier.
  3. To view an aggregated category of cancellation reasons, you could use the filter to search for a single keyword, e.g. Cancellation reason - contains - Bugs rather than Cancellation reason - is - Bugs: Android.

Note: It often helps to be as specific as possible when filtering the reasons for churn, as usually your findings will be more actionable. In the example filters above, knowing that more customers cancelled because of bugs in your Android app than any other platform would help you to allocate resources more effectively.

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To compare multiple cancellation reasons

  • Click New segment
  • Click Add filter and select Cancellation reason - is, and select a second cancellation reason to compare.

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By creating a saved segment for each cancellation reason, you can compare the impact of cancellation reasons on your Net Cash Flow.

In the example below you can see that the cash flow before churn for the Android app has increased at a faster rate than other reasons. When minimizing churn and Net MRR churn rates, this would be the most impactful churn reason to address.

Screen_Shot_2017-05-12_at_15.23.41.png

 

What we learned

So far, from the example above, we've learned that:

  • Bugs in the Android app are most likely to cause a customer to churn,
  • Bugs in the Android app have the most significant negative impact on Net Cash Flow

To address this problem we could:

  • Fix the bugs in the Android app
  • Ensure that bugs are reported by a customer before they cancel their accounts, so that they can be pre-emptively fixed
  • Investigate whether these actions succeed in driving down churn rates by looking at your customer churn cohort analyses

 

Next steps

Once a churn reason is resolved (e.g. a bug is fixed) you could use Segmentation to export customers who churned for that reason to a CSV file and reach out to them in case they want to reactivate their subscription.

To take your analysis of churn reasons a step further you could implement ultra-specific churn reasons categorization. For example, instead of 'Bugs', you could define something like 'Bugs - IOS - login'. This allows you to make much more specific decisions and focus your churn reduction efforts.

Share your analysis 

Do you have a particular analysis in ChartMogul that has helped gain unique insights? Do you think it could help other users? Please send it to us at support@chartmogul.com