Decrease churn rate is a critical challenge that many business face. They invest a lot of money and effort in bringing in new customers as Customer Acquisition Cost (CAC) keep on rising, so it becomes critical to retain those customers.
In this case study I am going to reveal just some of the little “tricks” that have a very big impact on customer decision making. Using techniques based on Persuasive Design Patterns we influence the decision of customers who decided to abandon the business.
LET ME EMPHASIZE:
- The best way to achieve a great Customer LifeTime Value (LTV) is by creating a product that gives the customer the best value.
- BUT in some industries where the competition is very strong and all the products in the market are very mature with low differentiation between them, we have no choice but to use various Persuasive Design Patterns.
I will list ALL the Persuasive Design Patterns in use and exactly how they helped to influence the customer decision.
Decrease churn rate – 1st A/B test
How do we want people to process this page?
In researches performed by Daniel Kahneman and others it turned out that People’s cognitive processes is divided into 2 “systems”:
- System 1 – our default way of thinking, using “short cut’s” so we can get answers quickly without wasting too much time & energy.
- System 2 – a way of thinking that we activate only in situations that are less familiar to us or that we need to process complex information.
Influencing on “system 1” is much easier because it is impacted by emotions, memories and intuition so we wanted that customers who see this page will remain using “system 1” and will not activate “system 2”
In order to do this we needed to keep everything very simple, low amount of elements, big & clear fonts and so on.
Engaging and raising a question
This is one of the most critical elements !!!
The customer has decided to uninstall and leave.
In order to engage and start influencing we do the following:
- the text is stated as if the decision is NOT changed ( “…before you go?”)
- It is in a form of a question – question causes our brain to process automatically !
Using Loss Aversion pattern
Loss aversion is one of the most known Persuasive Design Patterns, it states that Our fear of losing motivates us more than the prospect of gaining something of equal value.
This is obvious when looking at The value function of prospect theory:
We take the understanding that “We are more willing to select a risky choice when we believe we are about to lose something than if we believe we are “just” gaining” and implement it here in the texts
- we mention the one thing every customer is dreaming about “your big payout”
- Since people will do a lot to avoid loosing – we use the negative “don’t miss it!”
- in the options below, the text is about “pass on my chance to win”
Using FRAMING pattern
It turns out that the meaning of reality–the experiences, events, objects, processes, and facts we encounter–is not set but rather it is dynamic. It’s not absolute, it’s contextual. It’s not passively observed but actively constructed. Framing is a feature of our brain’s architecture. Our minds react to the context in which something is embedded, not just to the thing itself.
I’ve used the FRAMING principle to change the context of “KEEP PLAYING”, by adding the 2nd option and now it’s not about keep playing or leaving, it’s about keep playing or loosing !
Using STATUSQUO-BIAS pattern
“We tend to accept the default option instead of comparing the actual benefit to the actual cost”
This Persuasive Design Pattern was used to design the main CTA : “KEEP PLAYING”:
- Using a big button that is perceived as the default ( people tend to choose the defaults, espicially when on system 1 )
- The button is located on the left ( the 1st thing that they see because the eye movement is from left to right )
- the text copy on the button is “Keep playing” – suggesting again to continue a decision they made ( but the truth is that the actual newest decision they made was to uninstall and leave )
- We’re creating a cognitive load to understand the 2nd option at a glance by making it small text, low contrast and long.
Using the Endowment effect
“People give higher value to things they own or have been using for a while”
I’m using this Persuasive Design Pattern in the main text : “one last round”, “your big payout”, “my chance to win”, “KEEP PLAYING” – emphasizing that the customer has spent a lot of time and money already…
Using the Negativity bias pattern
“We have a tendency to pay more attention and give more weight to negative than positive experiences”
I’m using this Persuasive Design Pattern to turn the customer away from leaving the product by associating negative consequences to this option
“don’t miss it”, “pass on my chance to win”.
The negativity is emphasized by suggesting that there will never be another chance to win (“pass on my chance to win”).
Using the set-completion pattern
“We desire collecting all pieces of a set. The desire is greater the closer it is to being complete.”
the customer likely got a lot of experiences during using the product, small loses, small wins,…
but there is one piece of the set he still didn’t collect : “your big payout”
Using the Limited-choice pattern
“We are more likely to make a decision when there are fewer options to choose from”
this is working for parents when they talk to their children’s ( if they don’t want him to choose C, they ask if he wants A or B ) and it is working on us also when we are grown up 🙂
Customers that reach this step actually have many ways to act upon, but by introducing 2 options we turn this into a very narrow selection process suited for system 1 way of thinking.
Decrease churn rate results of adding this extra step
The version that included the extra step resulted in decrease churn rate by 17% in compare to the default ( without this step )
After the optimization of this step, we had the following thoughts:
- Already saw that even when a customer is making a decision, we can influence and revert it…
- Wanted to test if we can influence the decision of the customers who managed to kept their original decision and continue with the installation process…
- Didn’t want to create a negative buzz in the internet
- Wanted to maximize the customer’s LifeTime Value (LTV)
We finally decided to show an additional step only to customers with HIGH POTENTIAL !
Decrease churn rate – 2 steps process
For customer’s with HIGH POTENTIAL that in the previous step clicked on “No thanks, i’ll uninstall..” we presented the above 2nd layer
this Step had the following additional elements to help us change the customer decision:
the HERO picture
Data analysis showed that most of the customers are males, so we chose a picture to appeal to man customers, the picture was chosen because:
- It is perceived as a REAL situation ( unlike a cartoon or a vector image, and it’s not taken is a studio )
- The HERO in the picture, the young guy has everything ! beautiful woman around him, smoking an expensive segar, admired by his friend, just after a win
Using an exact dream amount
“Frank just won 336,420.61 at Brand_name”
It is perceived as a real example, the guy has a name, and he didn’t won 10,000 – he won exactly 336,420.61 !
everything seems real.
and we are not raising any objections from the customer because at this point we are not talking about him…
“Will you be our next big winner?”
After we planted the image of possible reality in the customer brain,
we make the association back to him in the same sentence – “Will YOU be our next BIG WINNER”?
BIG BUTTON vs very small close icon
again I’m using the STATUSQUO-BIAS pattern,
The default action with the least effort to choose from is to click on the “KEEP PLAYING” button
the 2nd option is very UN intuitive – he needs to understand that in order to proceed with the uninstall process he needs to close the layer, and closing the layer is done with a very small, low contrast icon.
This 2nd option requires a BIG cognitive overload.
Decrease churn rate results of the 2 steps process
By adding the 2nd layer we managed to decrease the churn rate by additional 9% !
I’ve written this case study to show how effective is using Persuasive Design Patterns.
The total Decrease in churn rate was 26%
We MUST use this only as a last resort with good judgement and ethics.
In this case, I knew that customers who left this product are just going to use a competitor product, so it was a better option that they will keep enjoying and depositing in my client product.
I hope you’ve gained valuable insights from this in-depth case study on Decrease churn rate.
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