Incentivize activation and time unlocks past churn points

1. Why make it worth their while

You have worked out what the perfect customer does (SOP 129 — Derive the activation point), and you onboard every new customer to do all of it (SOP 139 — Onboard customers to the activation point). Next, make it worth their while to do it. That can mean recognition, new features, products free or at a discount, closer access to important people, and so on. Do what makes the most sense for what you sell.

The reason, from one business's own figures: the vast majority of its cancellations come from customers in the bottom two tiers of engagement, which means the vast majority of the customers it keeps sit in the top tier. The conclusion drawn: the more a customer uses the product, the longer they stay a customer.

2. Incentives for activating

The kinds of incentive given, from one business's own list:

• courses that unlock;
• one-to-one consulting calls, or bundles of calls, once the customer reaches a certain length of stay or status;
• tickets to live or virtual events;
• access to a further set of higher-tier calls;
• custom badges, profile images and other signs that say they are "in".

A shorter list of the same options: a course, a one-to-one call, a live or virtual event, a set of higher-tier calls, a custom badge, a profile image, or some other sign of status that they are "in".

3. Unlocks just past the points where customers leave

You can also reward staying longer for its own sake. Put some incentives just after major churn points and you can keep more of the customers who are on the edge. This is called easy and effective. For example, if most customers leave after the third month, have something good unlock in month 4.

A timing for these time unlocks, each drawn from the list in section 2:

Unlock	When
First	Past the average customer lifespan
Second	30 days after that
Third	3 months later
Fourth	3 months after that

Flag: before the churn point, or after it.

• This page: put the incentive just after a major churn point; if most customers leave after the third month, something unlocks in month 4. The cost, as SOP 158 counts it: customers who leave before the average point, or who decide a month or two ahead, are gone before it unlocks.
• SOP 158, section 4: give the incentive one to two months before the churn point; for churn at month six, at month five or month four. The cost: the reward arrives before the customer has stayed past the point it was meant to carry them over.

This page does not settle which reading is right.

4. The action step

Give your customers relevant and valuable incentives to become perfect customers. To cut churn further, make other good bonuses, unlockables and the like available only once customers have stayed past major churn points. You do not need to build it all at once: each change is said to help on its own.

5. Watch for customers who stop using what they pay for

A leading indicator of churn is what is called usage churn: a customer who keeps paying for a subscription but has stopped using the product. If you sell an annual contract and a customer stops using your service at 6 months, they are likely to churn. If you catch them right when they stop and get them using it again, you are likely to keep them. The same signal, as the moment to offer a lower price for what they still use, is in section 9 of SOP 73 — Feature-downsell customers before they cancel. A weekly red, yellow or green score on every account is SOP 273, section 3, and a health score from usage for a member community is its section 10.

6. What this page does not decide for you

• Where the first unlock goes. The body puts incentives just after major churn points (month 4, where most leave after month 3); the timing table starts the time unlocks past the average lifespan. Not established on this page whether these are the same point in your business.
• What counts as a major churn point. Not established on this page.
• Which incentive to offer first. Not established on this page.
• What counts as no longer using the product. Not established on this page.

7. The checklist

Step	What you do
Make it worth it	Reward customers for doing what the perfect customer does: features, recognition, free or discounted products, access, and so on
Fit	Do what makes the most sense for what you sell
Activation incentives	Unlocking courses; one-to-one calls or bundles at a set length of stay or status; event tickets; higher-tier calls; badges, profile images, signs they are "in"
Staying incentives	Just after major churn points; if most leave after month 3, unlock something in month 4
Time unlocks	Past the average lifespan; 30 days later; 3 months later; 3 months later again
Build	A piece at a time; each change helps on its own
Stopped using it	Watch for paying customers who stop using it; catch them right away and get them using it again

8. What this page does not cover

Finding the activation point is SOP 129. Onboarding is SOP 139. Giving customers something at each of four milestones, paired with unlockables, is SOP 143 — Build the four-milestone customer journey. Contacting customers more often when they stop consuming is section 1 of SOP 131 — Run the keep-one and remove-one survey. The cancellation call is SOP 132 — Run the cancellation call.