Why should you care about Net Negative Churn, what is it, and how do we achieve it?
A low churn rate is a great goal. You know what’s an even better goal? Net Negative Churn! As your company grows and you have more and more active subscriptions, churn becomes tougher to manage and each lost customer has a harder hit. When you’ve achieved Net Negative Churn, you’ve increased revenue from existing clients (typically upgrades or upsells) so much that it’s out doing your lost revenue from existing clients (downgrades, cancellations). Know that we’re talking revenue churn here, not overall user churn.
Achieving Net Negative Churn is the ultimate sweet spot for your business and an area you should focus on as your care plan MRR business grows.
Customer Success is typically responsible for working on Net Negative Churn and expanding existing customer accounts. Customer Success will work to increase the company MRR without the addition of new customers to achieve Net Negative Churn.
Here’s how to get your Net Negative Churn % Rate:
Lost revenue % (cancellations/downgrades) – Expansion revenue % (Upgrades/upsells) = Net Negative Churn %
Simply, as long as your expansion revenue % is higher than your lost revenue %, you’re achieving Net Negative Churn. Keeping tabs on this from the get-go will give you a huge advantage when running your MRR business. You can learn more about what data to track in your MRR business and how, here.
How to achieve Net Negative Churn in your WordPress care plan business
OK, so winning new clients for your WordPress care plan business is a tough enough goal all on its own, without bringing existing account expansion goals into the mix, too. But, if you focus on just a couple of existing account expansion areas, you’ll be well on your way to scaling your care plan services and you’ll have enough recurring revenue from existing customers to see you through even the toughest of times for your business.
I’ve broken down some specific actionable steps that you can take, even if you’re a solo WordPress consultant, freelancer, or small WordPress agency without many in-house resources.
If you can keep new customers flowing in at the same time as increasing the MRR of your existing clients, then you’ve reached a new level of MRR awesomeness. That’s why I’ve included one or two ‘new business’ strategies in this list, as well as existing account expansions.
Add plans to existing customer accounts
If your client trusts you to manage one of their websites, chances are, they’d trust you to manage another either now or in the future. Adding a second or even third website to an existing customer account is an excellent way to increase MRR without the need to take on an additional client.
Some ways you can add additional websites to your existing client accounts:
- Reach out to existing clients via email to discuss looking after more of their websites
- If you’re running a new customer onboarding sequence, add an extra email that specifically highlights the advantages of having you manage a second website for them.
- Offer a small discount for adding multiple sites.
Upgrading existing care plans
There’s a lot of room for upgrades in a WordPress care plan business, especially when your services run on a tier format. Customers on a lower plan level can be up-sold to higher-level plans based on you providing more value and saving them more time. By regularly keeping in touch with your clients, you’ll find it easier to identify these opportunities. For example, you may find out that one of your clients on a lower level plan has concerns around their website speed. That’s a great opportunity to discuss upgrading their plan so you can fully manage speed for them on a higher-level plan.
Some ways you can upgrade care plan levels for your existing client accounts:
- Add an extra email into your onboarding sequence, highlighting the value of higher-level plans
- Make sure your support team recognizes upgrade opportunities so these can be handed over to Customer Success
- Speak with your client base regularly and learn about their website needs. You may find that your client naturally needs a higher-level plan based on their changing support needs
- Enroll clients into customized automated email upgrade sequences
Reactivation of previously churned customers
Tracking your lost revenue each month will allow you to circle back to these clients and try to win them back. Any previously lost clients (user churn) returning would be an awesome win for your business but you also want to track lost revenue for users that are still with you (revenue churn). These are users who may have had multiple plans/subscriptions with you, but some of the subscriptions for this user churned and left your service. Reactivating website care plans for existing clients adds revenue back in and adds to your Net Negative Churn rate.
Here are some ways you can reactivate churned subscriptions for existing clients:
- Send informal check-in emails to these clients to see how things are going. This re-engages the client and allows you to figure out if they’re still struggling with WordPress.
- Give your client a call if you choose to communicate via phone
- Hip on a Zoom call to chat about the websites you used to manage and identify areas you can provide value again.
- Enroll churned customers into an automation sequence which nurtures over the coming month. Hint: HubSpot Sequences is awesome for this.
- Offer an incentive for returning customers
Encourage existing clients to join your Affiliate Program
New business referrals from existing or previous clients is one of the best lead sources for you. When your existing customers refer their friends, business partners and people they know, they fully trust you and love your service. If people are referring you, they’re far more likely to work with you again in the future and handover more websites for you under their existing account. That’s why having an affiliate program for your existing client base is worth a shot! Nowadays, you don’t need to be a professional affiliate manager to set up and run a program of your own, either.
Here are a few resources for setting up your own affiliate program and systems to help you manage it:
With a few Net Negative Churn strategies now under your belt, I hope you’ll be able to implement one or two so that you can start seeing increased account retention and growth in your business. The ideas discussed above are really just starting points, and when it comes to actually implementing these in your business you’ll need to experiment to see what works best for you. Go another step up and automate some of these processes to free you up in your business even more.
If you have any other ideas on existing account growth that I haven’t included here, leave a comment and I’ll have them added!
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