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11 January 2022

7 Crucial Steps To Creating A Stellar Customer Offboarding Program

by Tony D'Auria Reading time: 10 mins

What Lasting Impression Will Your Customers Be Left With?

Without question, the absolute worst part of working in the subscription economy is customer churn. In Customer Success (CS), we’re measured on it, driven by it, and avoid it like the plague. 

Unfortunately, it’s also inevitable. While your business is likely doing everything in its power to prevent churn, it’s important to understand that some churn will happen. When this occurs, it’s critical to have an offboarding process in place that embraces this inevitability and manages the experience of the customers who are leaving you in a seamless and positive way. By taking a proactive approach to offboarding, you can handle and prepare for any potential fallout from the exit.

In this article, we examine why making a positive last impression is critical to your long-term business strategy, and outline 7 impactful steps to creating a stellar customer offboarding program that will garner the respect, admiration, and potential future business of your customers.

The Importance Of Parting On A Positive Note

Let’s put this into context: fans of Seinfeld will recall a memorable episode where Elaine encounters Alan, the “bad breaker-upper.” Alan is the guy that “doesn’t break up nicely” and gets promptly dumped by Elaine. “I can’t be with someone who doesn’t break up nicely,” she says, “I mean, to me, that’s one of the most important parts of a relationship.” Unfortunately for Alan, his poor breakup skills have offended many, tarnished his reputation and left him stabbed, burned with hot coffee, and stabbed again. 

What Alan didn’t realize, or doesn’t seem to care about, is that the way you exit a relationship is as important, if not more so, than the way you enter and nurture a relationship. The same can be said about the vendor-customer relationship in your organization. Think of the organization and the individuals as separate entities; just like Alan’s ex-girlfriends, your ex-customers have the power to refer you and do business with you again, or destroy you and stab you with a fork (figuratively, of course). While the organization may end their business relationship with you, the individuals involved can still provide invaluable insight and opportunities if you make the offboarding experience easy and pleasant. 

The Data Behind Positive Customer Sentiment

Customers usually remember their first experience with your organization, their most intense experience with you (whether that be helpful or harmful) and how the whole relationship ended. If you don’t end your working relationship on a high note, then your customers are more likely to view your business negatively and tell others about it. In fact, some research finds that 95% of customers will tell others about a bad experience (Zendesk, 2013), and other data says the average customer will tell 15 people when they encounter a bad customer experience (American Express, 2017). Either way, that’s bad news for new business.

On the other hand, if you end the relationship on a positive note, the individuals involved may still refer you, buy your product if they join another organization, or give you another chance to sell to the business down the line. According to Qualtrics, customers who view a company’s service as good are 38% more likely to recommend that company to others (2020). Therefore, it’s crucial that you leave your customers with a positive and lasting impression of your business and learn from the churn you experience. 

7 Steps To Create A Stellar Offboarding Program

1. Understand The Customer’s Reasons For Leaving

Once a customer submits a cancellation request, acknowledge their decision and start the offboarding process immediately. Waiting days or weeks to get in touch will automatically set the tone for a negative offboarding experience.

Begin your offboarding process by understanding why the customer is leaving. Obtaining feedback from offboarding customers is vital to identifying why your organization is currently experiencing churn, and illuminating improvement opportunities  to prevent future churn. Depending on your segmentation and touch model, this feedback can be obtained by the Customer Success Manager (CSM) in charge of the account or through an email, survey or phone call. It’s important to remember that churning customers have little incentive to provide feedback, so using a mix of qualitative and quantitative methods may help you elicit more responses. A simple survey consisting of 1-3 easy-to-answer questions that target the crux of the problem (e.g. what’s the single biggest reason for you canceling your service?) is a great starting point.

2. Segment Your Churning Customers

Churning customers will have varying reasons for leaving your business, but they will usually fall into one of two categories: avoidable and unavoidable churn. Determining which category a particular offboarding customer falls into will help you evaluate if there’s an opportunity to save that customer and retain their business. 

Customers who fall into the avoidable churn category are those leaving your business for reasons under your control, such as a disconnect between product expectations and their needs, dealing with countless bugs, or support issues. Obtaining feedback from these customers can help you change their mind by highlighting features they may be unaware of or understand how you can better service customers to avoid future churn. 

 Unavoidable churn customers are those leaving you for reasons out of the realm of your control, such as the completion of a project, a merger/acquisition or the company going out of business. While you may not be able to retain these customers, you can still garner valuable insights about your product and processes. By analyzing unavoidable churn, you can understand how your customers used your product and the benefits they derived so that you can leverage this feedback in your Sales and Marketing use-cases. 

3. Develop A Thorough & Scalable Offboarding Process

Once a customer is committed to leaving, you need to provide an easy and positive offboarding process. Think of your onboarding process and flip it around – your offboarding process should be as pleasant of an experience as when your customers first signed on. Develop a robust offboarding program, complete with a checklist of all necessary offboarding tasks for your CSMs, so that this becomes a repeatable and scalable process across your organization. 

Begin by taking inventory of your current processes and mapping your offboarding experience from the customer’s perspective as a cross-functional exercise involving Sales, Support, Product and Customer Success. Together, answer the following questions:

  • What is the first form of communication a customer receives once they decide to leave?
  • What, and how many, emails do customers receive?
  • Do Account Executives and CSMs have a script they use to communicate with customers that are churning?
  • What is the current in-product experience for customers shutting down their use of the product?

This cross-functional exercise will help you identify gaps in your current offboarding process and empathize with your customers to create an effective offboarding experience.

4. Conduct An Exit Interview (If Possible)

While surveys and email correspondence can provide some insight into why customers are leaving, an exit interview will allow you to dig deeper and gain a more thorough understanding of their nuanced motivations. As with surveys, not every churning customer will be willing to take the time and provide you with detailed insights, so start by looking at customers who gave detailed answers to your qualitative questions – they are the ones who are interested in providing thorough feedback. 

The insights you obtain from an exit interview all depend on how you conduct the call. Don’t interrogate a customer or defend your mistakes – this interview is all about listening to the customer’s experience and determining how you can improve as an organization moving forward. Be helpful and empathetic in your approach – instead of asking, “What will it take me to save your business?” ask them, “ What could we have done differently?”

Come up with a standard set of questions that your CSMs can ask churning customers and build that into your offboarding program. At Valuize, we focus on the 4 P’s:

  • How was your experience with our Product?
  • How was your experience with our People?
  • How was your experience with our Process?
  • How did you feel about our Pricing?

At the end of the interview, thank your customers for their time, honesty and their business. Be sure to assure them that you will take action on their feedback, and remind them that the door is always open should they wish to return.

5. Implement Your Customer Feedback

Obtaining and gathering feedback is only useful if you act on it. Based on the feedback you elicit and the gaps you discover, make improvements to your product or processes as needed. If one customer is churning because of issues in your product or processes, chances are that they are not alone and other customers may follow suit. Use the feedback to to set up churn triggers that notify you of potential future churn. This will give you the opportunity to reach out and save a customer before it’s too late. 

To create effective churn triggers, combine the feedback you receive from customers with quantitative data you can gather about their habits and product usage. Compare and evaluate all of the available data you have about the customer to answer the following:

  • How active was the customer in the overall ecosystem?
  • Was the customer an active and regular user of their account? 
  • Was the customer using the tools correctly?
  • How many product features did the customer utilize?
  • Is there anything out of place or of interest in the customer’s CS and support interactions? 

Collecting this data is an essential exercise for customer health scoring, risk evaluation and other nurture programs aimed at increasing adoption and reducing churn.

6. Provide A Smooth Technical Offboarding Experience

Once the administrative side of the offboarding process is complete, you can begin the technical offboarding process. Give the customer a clear understanding of what to expect and a detailed breakdown of next steps. Make cancelling easy from a business, and human, perspective; give your customers easy access to all of their documents, assets and data. This will simplify the process of offboarding for customers and make it that much easier to come back. The harder this experience is, and the more work they have to do to contact you for simple troubleshooting, the more likely they are to share negative reviews with other potential future users.

7. Leave Your Customers With A Great Parting Impression

Your customers are people and they deserve to be treated with dignity and respect, regardless of why they are ending their contract. Finish your customer offboarding experience with a sincere and simple, “thank you!”. Check in with them one month after their offboarding is complete to ensure everything went smoothly and that they were able to access all the assets they needed. This also gives you an excuse to get back in touch and maintain a relationship with your customer post-churn. If the customer is ever able and ready to return, they will remember these thoughtful gestures.

Learn & Grow From Churn

Customer churn is an unavoidable reality in today’s competitive subscription economy. While you may not be able to save every customer, you can create a solid customer offboarding process that makes this transition easy, smooth and pleasant for both your customers and your employees. By following these 7 critical steps, you will not only leave your customers with a positive and lasting impression of you, but also gather customer insights that will help you improve, change and grow your business to better retain and expand customers in the future. Oh, and you won’t end up like Alan. 

Successfully implementing an organization-wide process, like a customer offboarding program, starts with effective change management. Follow these 5 steps to master organizational change management in your organization to guarantee the success of your programs.

Tony D'Auria

With over 10 years of experience in customer success, operations, leadership and process development at companies like BlackBerry and Oracle, Tony helps companies define, build and deploy customer success strategies across their organization. As a customer success strategy consultant at Valuize, Tony is focused on delivering scalable outcomes that drive business growth through collaborative problem solving.