The Churn Zone: 3 Key Phases Where You Lose Customers

Customer churn doesn’t simply happen when a customer decides to leave—it begins long before, often during these three critical moments. Understanding these key phases can help businesses proactively address potential issues, reduce churn, and improve customer loyalty and satisfaction.

Customer churn is a significant concern for businesses across industries. Losing customers means losing revenue, but more importantly, it also indicates underlying issues in how a company engages, retains, and supports its clients. What if we told you that more than 75% of customer churn happens during just three specific phases of the customer journey? In our exclusive webinar, "The Churn Zone – The Untold Story of Where Customer Churn Really Happens," we’ll dive deep into these overlooked areas where churn is born and provide insights into how you can stop it in its tracks.

1. The Last 25% of the Sale: Aligning Expectations

The sales process is where it all begins. By the time a customer is nearing the final stage of their purchase, they should be confident in their decision to choose your product or service. However, the last 25% of the sale is a crucial period where unmet expectations and misalignment often occur, opening the door  to dissatisfaction before the deal is even finalized.

Why Does Churn Start Here?

• Misalignment Between Sales Promises and Reality: Sales teams are often incentivized to close deals quickly. In the rush to secure a sale, they might overpromise or under-communicate key details, leaving customers with unrealistic expectations. When reality , doesn’t meet these promises, frustration, and distrust begin, and  the seeds of churn are planted.
• Lack of Clarity and Transparency: Customers need confidence in their decisions. Vagueness or ambiguity in the terms of the sale or the product’s capabilities creates hesitation.  . This hesitation can turn into dissatisfaction and put a strain on the relationship. If these issues are not addressed they can quickly lead to churn.
• Missing Subject Matter Expertise: Modern sales solutions and client environments are very complex, and it's easy for important items to be missed during the initial scoping stage in the client relationship.

How to Combat Churn During the Sales Phase

• Set Honest, Clear Expectations: Ensure that your sales team is well-trained to communicate the value of your product accurately. Avoid the temptation to overpromise just to close a deal. Instead, focus on setting realistic expectations so customers know exactly what they are getting.
• Involve Technical or Customer Success Teams Early: Bringing in technical or customer success experts can help address customer questions and clarify how the product will meet their needs. This ensures a smooth handoff to the next stage of the customer journey.
• Use Detailed Documentation and Case Studies: Providing detailed case studies, FAQs, and product demonstrations can help clarify what customers can expect, reducing misunderstandings and setting a solid foundation for satisfaction.

2. The Sales Hand-off and Onboarding Process: Setting the Right Path from the Start

After a deal is closed, the next critical phase is customer onboarding. This is where the real customer journey begins, and it’s essential to get it right. A poor onboarding experience can set your relationship on the wrong path, leading to early signs of customer dissatisfaction and, eventually, churn.

Why Does Churn Occur During Onboarding?

• Poor Sales Hand-off: Lack of continuity and loss of important conversations and needs from the customer. Commonly known as the customer saying it feels like we are starting all over again.
• Configurations and Setup Issues: If your product requires complex setup or configuration, errors can lead to customer frustration. Errors  that prevent customers from seeing the true value of the product can cause doubts about whether your solution is the right fit.
• Unclear Guidance and Recommendation: Customers need clear, step-by-step guidance during the onboarding process. If they’re left to figure things out on their own, they might become overwhelmed or confused, leading to early disengagement.
• Failure to Demonstrate Value Quickly: During onboarding, customers are eager to see the value they were promised during the sales process. If they don’t receive early wins, they might lose interest and question their purchase decision.

How to Improve the Onboarding Experience

1. Create a Detailed and Mutual Onboarding Plan: Develop a structured onboarding process that guides new customers step-by-step through setup, configuration, and initial use of the product. Make sure this plan is consistent and can be easily followed.
2. Offer Personalized Support: Tailor the onboarding experience to the needs of individual customers. This can include offering dedicated account managers, personalized setup guides, or tailored training sessions to ensure that customers feel supported. Provide this to the customer in a centralized portal experience like ProteusEnage. 
3. Demonstrate Quick Wins: Identify the key features of your product that can deliver immediate value and make sure these are highlighted during onboarding. When customers see quick results, they’re more likely to remain engaged and continue exploring the product.

3. The First 120 Days Post-Launch: Proving Value and Building Engagement

The first few months of a new customer relationship are critical.  During this time, they assess whether you are delivering on your promises and they will determine if they are willing to continue with you long term. New clients have limited patience, and if they don’t start seeing results or value quickly, their engagement drops, increasing the risk of churn.

Why Is This Period Critical for Churn?

• Limited Time to Prove Value: Customers expect to see benefits from your product relatively quickly. If they’re not seeing positive outcomes they might start to question the value of the solution and begin exploring alternative options.
• Low Engagement and Usage: If customers are not actively engaging with your product, it’s a clear sign that they’re not experiencing its value.Customers are less likely to renew if they’re not using the product regularly.
• Ineffective Communication and Follow-Up: After the onboarding process, some companies fail to maintain regular communication with their customers. Without continued engagement, customers might feel neglected and be more prone to looking for other solutions.

Strategies to Reduce Churn in the First 120 Days

1. Regular Check-Ins and Feedback Loops: Schedule regular check-ins with new customers to address open issues.. This can be done through dedicated account managers, automated feedback surveys, or scheduled touchpoints to gather feedback and show that you’re invested in their success.
2. Monitor Engagement and Take Action: Use data analytics to monitor how customers are engaging.. If engagement levels drop, proactively reach out to offer support, additional training, or resources to help them get back on track.
3. Create a Customer Success Plan: Develop a customer success plan that outlines clear milestones and goals for the first 120 days. This helps customers understand what their full potential and how your offering aligns with helping them achieve their goals.

Navigating the Churn Zone with Proactive Strategies

Understanding where churn is most likely to occur is the first step to preventing it. By recognizing the critical phases of the customer journey—the last 25% of the sale, the onboarding process, and the first 120 days post-launch—businesses can take proactive measures to address potential issues before they lead to customer loss.

Each of these phases presents unique challenges but also offers opportunities to strengthen customer relationships. Setting clear expectations, providing a smooth and supportive onboarding experience, and maintaining engagement during the crucial early months can make all the difference in reducing churn rates.

By focusing on these three key areas, businesses can not only reduce churn but also build lasting, positive relationships with their customers. Reducing churn isn’t just about preventing losses; it’s about creating value and ensuring that customers see the benefits of staying with your company, leading to sustainable growth and success.