Using the 5Ws to reduce customer churn

My love for the 5Ws was professed (or at least implied) in a prior post, proving that I am not afraid to express my deep affection for abstract concepts - luckily I have a very understanding wife. So here we go again, another ode to the 5Ws, one of the simplest yet most powerful ways to generate ideas to improve your business.

Let's kick things off with a marketing poem that's all about reducing customer churn... or as I like to put it, fixing those darn leaks in your bucket 'o customers:

There's a hole in the bucket, dear Liza, dear Liza...
Then fix it dear Henry, dear Henry, dear Henry...
With what should I fix it, dear Liza, dear Liza?...
With the 5Ws dear Henry, dear Henry, dear Henry
With the 5Ws dear Henry, dear Henry, with the 5Ws...

How to use the 5Ws to reduce customer churn

1. Use the 5Ws churn matrix to generate ideas. Use the 5Ws Customer Churn Matrix (see it below) to generate as many ideas as possible for why customers might cancel or reduce the use of your product or service. You will be amazed at how rich & vivid your perspective on your customers will become (no, I didn't borrow this line from an infomercial).
   
2. Validate your ideas. Which of your ideas actually result in customer churn? There are a number of ways to validate your ideas, from surveying canceled customers to bouncing them off customer service reps.*
   
3. Find the biggest leaks. Of the cancellation reasons you have validated, which ones account for the largest % of customer attrition? You want to make sure you focus your attention on the biggest chunks to maximize the business impact of your efforts.
   
4. Design ways to plug the holes. How can you reduce or eliminate the biggest drivers of customer churn? Common strategies include making enhancements to your product or service, creating promotional or loyalty programs, retraining your sales & service reps, altering your approach to distribution, and developing new partnerships.
5. Plug away! Unfortunately it's not enough to simply think up cool & innovative ways to reduce customer attrition... you have to execute, execute, execute...
   
6. Measure & adjust. What's working? What's not working? What could work if you made a few minor tweaks? At this point you're looking to optimize your strategies through ongoing measurement & adjustments.
   

Click here to download matrix in PowerPoint

Please share your experiences!
Enough about the 5Ws and my curious fascination with matrices! How do you go about identifying why your customers cancel your service? What have you found to be most effective? Please share your experiences - good, bad or ugly.








 
Additional posts on using the 5Ws to improve your business

• Marketing & the 5 W's: why every marketer should take a journalism class
• Marketing & the 5 W's: a framework for marketing innovation

*While you should always be surveying canceled customers and speaking with service reps, arming yourself with the ideas generated from the matrix will significantly enhance the value you derive from these activities.