Stay in the latest updates. Get the latest tips and advice delivered straight to your inbox. Email Ellis Luk | July 10, 2013 | Top 10 Reasons for Account Cancellation (and what you can do to prevent it) Identify the top 10 reasons for account cancellation and what you can do to prevent them. Learn customer success tips on the Totango Blog It’s not me, it’s you. In the customer and SaaS vendor relationship, it’s very likely that SaaS companies are the ones being left brokenhearted. When did the customer make the decision they were going to leave? Why won’t they give us another chance? How can I make them stay? But maybe, it’s their own darn fault. If account managers and sales reps are focused on “the hunt” and trying to upsell — it is less likely they’ll be able to keep track of each deal they close and how they’re doing. This gap is most easily covered by customer success managers. I polled a couple of customer success communities on LinkedIn to see what CSMs had to say about why customers canceled. There could be a multitude of reasons why customers cancel, but sadly many companies don’t catch on until its too late to save the account. Here are the top 10 reasons why customers cancel. Once you know why, then you’ll know what to look out for and when to intervene. 1. Not seeing ROI on their investment after purchase Could it be buyer’s remorse? Or maybe their expectations were too high? What to look out for: Decrease in usage or straight up inactivity after sign up What you can do: Review their goals set with your product and guide them throughout the onboarding/adoption phases so they aren’t left to their own devices early on. 2. Not implemented in time They can’t determine ROI if they’re not up and running nor fully evaluate the solution. They want it, and they want it now! What to look out for: Account not fully set up What you can do: Establish an internal customer journey map and use it to help guide users through the optimal adoption plan and lead them towards value. Using customer engagement management solutions, it is possible to keep track of their progress and be alerted when there’s been a stall. 3. Loss of key user or advocate What to look out for: Decline in interaction with advocate What you can do: Offer switchover training for new users and make sure you know more than one person on the team where possible. It’s important to maintain high-level visibility to keep management onboard. 4. Poor utilization and/or adoption What to look out for: Low usage or usage drop, user engagement is stagnant What you can do: Ensure successful adoption by guiding them through the process and understanding their goals. Then internally define clear parameters that would help identify what is considered “poor adoption/utilization” to allow the CSMs to proactively go on a rescue mission. 5. Not realizing the value proposition Sometimes they may need a bit of encouragement to show and remind them of the ROI from your product. However, if your support isn’t timely or helpful or have issues with billing or have a hard time working with someone from your side, they might not see value. What to look out for: Number of support tickets, question value of investment What you can do: Help benchmark your accounts’ engagement over time to show them where they are improving. Present them with some statistics to show the positive impact of their investment. 6. Lack of features in the product Many SaaS customers will cancel simply because other (competing) services are adding new features and moving forward. They’re going to want the latest and the greatest, not 2012. What to look out for: Feature requests or feedback from users What you can do: Have your CSM reach out periodically to source feature requests or even during their check-in calls. It is helpful to get their feedback if you are monitoring their usage within certain modules and then proactively asking them what they think. Then remember to share this feedback with the product team to let them know what really matters to the customers. 7. New management This is when new management comes in assessing why we’re using this or that. This opens the door to justifying the expense of your current solution and why not another. What to look out for: Information about management change What you can do: Proactive call to introduce self and solution to new management and offer training. 8. Buggy product What to look for: Increase in support tickets or calls for help What you can do: Be knowledgeable, empathetic, and offer solutions/alternatives in a timely fashion. Then make sure to tell your development team to fix the bugs! 9. Outgrow solution or company downsizes What to look for: Requests for advanced features or lower fee structure What you can do: Share this feedback internally. There might be options to scale up or down on the product. Communication is key. 10. Not a right fit, the product is not for them What to look for: Customer’s understanding/expectations of your product are not accurate What you can do: Participate in the tail end of sales discussions and offer a clear path for implementation/onboarding to set clear expectations. Bonus: 11. The people factor All it takes is one bad experience for a customer to write off a company. It’s important to pay attention to all the customer-facing people on your team, regardless of department or function. If your sales team thinks a certain CSM’s personality might align well with a customer, it’s good to consider these pair ups, and vice versa. 12. Acquisition by a company that has standardized on another solution. (via Chuck DeVita from Growth Process Group) Have you experienced other reasons (absurd or not) that customers have canceled? I’d love to hear your thoughts in the comments below. A follow up blog: All non-renewals lead back to adoption. Popular Posts A day in the life of a Customer Success Manager: What do they do? 15,858 views The difference between Customer Success Managers and Account Managers 12,931 views Your 90 day plan as a new VP of Customer Success 5,496 views Ellis Luk I'm the marketing and communications manager at Totango - but you can call me Chief Content Officer. When I'm not writing, you can find me obsessing over memes, debating grammatical usage or getting distracted by the latest Tumblr gif blogs. Customer love starts with a friendly hello! Scott Krager Good list! One I might add is billing issues not known by the customer. Their card expires or is over a limit and they miss the emails from the billing service. That’s one that is fixable, but just requires a little followup. Ellen Thanks Scott – that is true, if billing doesn’t go smoothly it can cause frustration! Appreciate your feedback! Scott Krager Good list! One I might add is billing issues not known by the customer. Their card expires or is over a limit and they miss the emails from the billing service. That’s one that is fixable, but just requires a little followup. Ellis Thanks Scott – that is true, if billing doesn’t go smoothly it can cause frustration! Appreciate your feedback! Ed Powers Interesting how this list aggregates neatly into four categories identified by previous research in the B-C space: 1. Lack of quality or value, 2. Lack of relationship, 3. Easy to switch providers, and 4. Other factors (need went away, bankruptcy, death, etc.). CSMs must often deal with systemic issues in other parts of the organization, but with the right structure and support, they can also influence continuous improvement. Ed Powers Interesting how this list aggregates neatly into four categories identified by previous research in the B-C space: 1. Lack of quality or value, 2. Lack of relationship, 3. Easy to switch providers, and 4. Other factors (need went away, bankruptcy, death, etc.). CSMs must often deal with systemic issues in other parts of the organization, but with the right structure and support, they can also influence continuous improvement. You might also like You might also likeNo Churn: 6 churn factors to keep an eye on BACK TO BLOG | NEXT ARTICLE Let's stay in touch! We’re passionate about customer success. Sign up to get the latest in thought leadership and to follow our adventures.