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

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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.

Jeremy Watkin
Jeremy Watkin is the Director of Customer Support and CX at NumberBarn. He has more than 20 years of experience as a contact center professional leading highly engaged customer service teams. Jeremy is frequently recognized as a thought leader for his writing and speaking on a variety of topics including quality management, outsourcing, customer experience, contact center technology, and more. When not working he's spending quality time with his wife Alicia and their three boys, running with his dog, or dreaming of native trout rising for a size 16 elk hair caddis.

5 COMMENTS

  1. Hi Jeremy,

    This is a great topic for discussion – Cancellation Experience. Thanks for this piece.

    1) Whenever I tried to cancel my LinkedIn premium subscriptions after expiry, they’d offer me 50% discount.

    2) When I tried to cancel my credit card subscriptions, the credit-card issuing banks would waive my annual fees for renewal (no questions asked).

    3) Every time I refused to continue subscribe any anti-virus software, they would cut down their offer to 50% (no questions asked).

    If I don’t attempt to cancel my subscriptions, these companies – the three example industries I mentioned – will charge me 100% of fee. It makes me a fool if I don’t go through the unsubscribe process.

    For those who have 100% trust that companies will give them the best to reward their loyalty (without ‘pretending’ to cancel their subscriptions) is penalized; I think similar thing is happening in other industries as well.

    Jeremy, do you have any suggestions on how to solve the root cause of these cancellation experiences?

  2. Hi Sampson, this is a great point. I could see this being a slippery slope if we talk about giving our best pricing/discount to every customer to avoid their call to cancel.

    I remember going around and around with customers who would sign up for the service and never use it and then argue that they should receive significant amounts of credit for lack of use. I see their point but too much of this and it becomes hard to stay in business.

  3. Hi Jeremy: I have similar observations as Sampson. When I have called companies to cancel service, the “retention specialists” offer discounts and other incentives to maintain my monthly subscription. This undermines trust, and strengthens my resolve to cancel. Until I called, the company was perfectly happy to charge me full-tilt boogie. Then, in a fitting display of faux-magnanimity, they tell me how valuable I am, and to demonstrate their sincerity, now they want to lower my prices. To me, this is too little, too late. I’d have more respect for them if they just thanked me and moved on.

    Asking customers to divulge the reasons for leaving can be a very sensitive question, and it must be carefully thought out and constructed. When I decided to drop one of our mobile phone lines, I contacted the provider and was asked by the call center rep, “What has changed in your situation that you want to discontinue this number?” Anyone reading this can fill in a number of possibilities that are indisputably none of this rep’s business. At the time, I said as much, and I suggested she might want to rescript her question so her next interrogation would go more smoothly. A better question might have been, “Do you no longer need the line?” Answer: yes, that’s correct. – To me, that seems sufficient marketing information. If my VP of Marketing wants more insight, I’ll suggest he or she reads up on social trends, mortality rates, and the like.

    By the time a customer contacts a service representative with the intent to cancel a service, and goes through the inevitable press 1, press 2, press 3 telephony routing, it seems to me that they really aren’t on the edge of terminating their service – they’re pretty committed. Is the idea that “the customer isn’t sure they want to walk out the door” wishful thinking on the part of the marketing director? If so, I think the best policy a customer center can have is eliminate cancellation friction (not reduce or maintain trace amounts ), and give customers the benefit of the doubt that they are rational, clearheaded decision makers. Making the termination process easy lives up to the ethos, “give customers what they want” (and not what the company needs).

  4. Thank you, Andy! I especially appreciate your perspective on asking for the reason for canceling and agree that there needs to be a level of sensitivity there. While not always, if companies want to know a reason for canceling they can often follow a trail of clues to gain that understanding rather than asking the customer to rehash something that has already caused considerable aggravation.

  5. Hi Jeremy: great discussion. I have thought about this a bit more, and believe that there are better solutions for managing churn than dropping the burden into the call center. A base-level of churn is natural, but many companies I work with don’t distinguish between preventable churn and natural churn. Instead, the edict is “preserve the account, no matter what.” For “retention specialists,” retention becomes a game, and as many of us know, they receive spiffs when they’re successful. But if you’re a customer, you feel like you’ve been through a gauntlet.

    If the objective is to keep retain-able customers, doesn’t it make more sense to be mitigate the risks “upstream” from the call center? If this throws the primary retention burden back onto the Marketing Director/VP, so be it. Speaking as a customer, I expect the service termination process to be as clean and efficient for me as the intake/capture process. As an alternative to retention specialist desperation, if the company wants me back, what about offering a waiver of setup charges if I reconsider within 60 days?

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