The Retention Blog by Brightback

The anatomy of a deflection funnel

In many ways, the funnel for deflecting churn is the reverse of an acquisition funnel. As a growth or product professional, you are looking for ways to reduce cancellations and increase customers deflected or saved.

The biggest difference between acquisition and deflection funnels is time. Whereas acquisition is often a once-through or short lived endeavor, retention is an ongoing exercise. Especially for monthly (or more frequent) subscriptions, customers can and will cancel after being deflected. Reverse Conversion (Deflection) rates for any single metric will often need to bake for a month or more, depending on the frequency of your subscription offerings.

It’s all about the cohorts

To make it easier to compare apples to oranges, at Brightback our deflection funnel always looks at a cohorts of users, not at visits or session. These cohorts are *user* based because we firmly believe that efforts to deflect should positively impact the user experience. Session-based metrics will often disguise user-negative tactics that ultimately impact downfunnel metrics negatively, like NPS, referral and ultimate cancellation rate.

Let’s look at one of our dashboards, for example. This dashboard shows deflection for Q1 of this year:

You’ll notice in the upper right corner that a cohort is selected for Q1 of 2022. This dashboard shows the performance of your efforts for users who entered your cancellation flow during that time-frame.

Cohorts will continue to age until your “save rate” window, which by default is set 30 days after the initial cancel page visit. To compare apples to oranges, you must look at a cohort that is at least 30 days old if you chose the default window.

We’ve designed two key metrics for gauging the performance of your Deflection Funnel:

• Deflection Rate, which is a leading indicator of the maximum amount of users that you can save (the number who were deflected in session). You’ll notice this in the top right corner.

• Save Rate, which is the ultimate percentage of users who are saved after a defined period of time (default 30 days). Save rate will, by definition, be lower than deflection rate. It increases as users who were deflected ultimately decide to cancel. In a way, it measures the “stickiness” of your deflection efforts.

The other metrics are supporting metrics

• Watch list shows users who were deflected by have not yet been marked as “saved” (ie: the cohort isn’t fully aged!)

• Deflected cancels shows the number of customers who have fallen off the watch list and cancelled

Save Windows and Uniques

There are some other gotchas in this data. Since we’ve created all these metrics on a user basis, it is possible that customers have multiple subscriptions and cancellations. We protect against this skewing your data via settings:

• Unique Save Period: This prevents customers who are saved more than once from showing up twice in your reporting, within a set window.

• Unique Cancel Period: This prevents customers who cancel more than once from showing up in your cancel counts, within a set window.

In addition, several states (NY and California) have passed laws protecting subscribers from these “grey hat” conversion practices. Both states now require subscription businesses to allow for easy cancellation. The recently passed california law goes a step further, requiring 1 or 2-click cancellation within your subscriber account portal.

Ultimately the sustainable way to rescue customers is by improving your product, customer experience, and cancel experience. Do not hide the cancel button!