Optimizing the Cancellation Experience: What’s the Right Amount of “Friction”?

Image by Gerd Altmann from Pixabay

This article was originally published on CustomerThink as my regular Advisor column on June 21, 2019. Click here to read the original post.

In my work with a variety of customer service teams to understand their top contact drivers, especially in relation to customer satisfaction, I often find account cancellations are frequently near the top of the list. Over the course of my career, I’ve encountered company cancellation policies on opposite ends of the spectrum. While you’d think that a high-friction experience in canceling an account would be more likely to cause significant customer aggravation, and it is, I’ve also seen cases where low-friction experiences upset customers.

What’s the best process for customer cancellations and what’s the contact center’s role in all of this given that the process of acquiring and keeping customers is more of an organization-wide initiative? Allow me to share more in-depth my experiences on both ends of the spectrum and then I’ll present an optimal approach for contact center leaders.

High-friction cancellations

In a previous role at a SAAS (software as a service) company, the option to cancel an account was buried in our user interface (UI) — and not necessarily for a great reason. It was more a matter of “that’s just where the programmer put it when they wrote that code.” For a time it wasn’t a customer-facing option at all which meant customers always had to contact support, but even after we granted access to customers, it was still buried in the UI.

This was a top contact driver for our contact center so I advocated with our team to allow customers to cancel on their own. Somewhere in the process of doing so we added an option to submit a reason for canceling and the ability to secure a discount in lieu of canceling. The next problem we ran into after asking for the reason for canceling was that no one knew where those cancellation reasons were being stored in our database to gain those important insights. So why ask for it in the first place, right?

In retrospect, I think our process was far from this viral cancellation call from 2014 given that we didn’t have a “retention team” actively adding hurdles to prevent customers from canceling. But it still was a high-friction experience that needed to be improved.

Low-friction cancellations

As I previously mentioned, you’d think that making it super easy to cancel would fix the problem from the customer’s perspective. Not so fast. I once worked with a client to understand their reasons for customer dissatisfaction and came across some comments like this:

I mentioned that I was thinking about canceling my service and before I could say anything else, the agent canceled my account. They didn’t even try to retain me. I would have considered pausing my account or even moving to a less expensive plan if given the option.

Oops! In an effort to be so low-friction, the company aggravated customers because their account was canceled too quickly. Perhaps low-friction has its drawbacks as well?

The optimal approach for the contact center leader

So what’s the best approach for handling customer cancellations? From the first example, while I would have loved to eliminate that from my list of contact drivers, I quickly found that our marketing, product, and finance departments had different views on the topic. They weren’t ready or willing to allow customers to leave without adding some friction to the process.

As I’ve given this more thought, I’ve realized that they weren’t wrong. Value and insight can be gained for the entire business. Here’s what I recommend for the contact center professional and company working to optimize their process.

Know what’s important to all stakeholders in your organization

As I began pushing my “Just let ‘em cancel” agenda forward, I quickly learned from our Chief Marketing Officer that his team’s success was measured by new accounts he was bringing in through marketing campaigns. If we readily opened the back door to let customers leave without any insight as to why they left there would be a major problem. What if marketing or sales was promising something that the product couldn’t deliver? This needs to be addressed and fast!

Build a business case

Speaking of what’s important to stakeholders, it’s important to think about the business case for low-friction versus high-friction. Some factors I looked at with my CMO in my first story included:

  • The cost of acquiring new customers to replace the ones that leave.
  • How much has that customer spent over the course of their life with your company?
  • The cost of those interactions or typical cost per contact for a cancellation call.
  • Success rate in customer retention efforts by offering discounts or credits.

As I think through these factors, the biggest concern for my boss were those high-value customers where value far exceeded the costs of supporting them. While I absolutely think a low-friction cancellation experience would have saved time and money, a safeguard to try to retain and restore our high-value clients was an important consideration.

Ask customers why they’re canceling — and LISTEN

If you’re going to ask customers why they’re canceling, you’d better be prepared to listen and respond accordingly. This was a part of the problem in my low-friction example. Customers wanted to be asked because they were actually looking for a discount or a better plan. While there will be plenty of cancellations because the customer simply doesn’t need or use the service, there are plenty more that are driven by price, features or lack thereof, and misunderstanding. Listening in the moment and responding accordingly can prevent unnecessary cancellations.

It’s important to note here that sometimes you have a UI asking the customer why they’re canceling and in other occasions you’ve trained your contact center agents to ask the customer. Either way, it’s important to capture this information and review it regularly. It also communicates to the customer that you’re sad to see them go, you value their business, and you’d happily welcome them back in the future.

Empower your agents (or UI) with actions they can take based on the customer’s response

While I’m not pushing for an incentivized retention program here, your agents should be equipped with responses and actions they can take based on the customer’s reason for canceling. For example, if price is an issue, perhaps a small discount or credit will retain some of them. If there’s a misunderstanding, a prompt escalation to a manager might restore their confidence in your company. Whatever the reason, it’s not acceptable to just let the customer walk out the door — especially when the customer isn’t sure they want to walk out the door.

Share insights with your organization

When I approached my CEO and told him that account cancellations were a top contact driver and that I wanted to give customers access to do this on their own his first question was, “Well why are customers canceling?” Clearly, this wasn’t going to be easy — and don’t expect your executives to let you off easy, either. When you look at cancellations as a driver of call center contacts, be prepared with the reasons and be prepared to quantify those reasons. These are valuable insights from your customers that folks in other departments crave.

As I conclude, I believe that a small amount of friction in your customer cancellation process isn’t necessarily a bad thing, allowing you to retain those customers that want to be retained and gain valuable feedback to get and keep more customers in the future. This is terrific way contact center leaders can add value to and influence the customer experience for their entire organization.

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