Reducing Customer Churn for SaaS
Communicate with Your Customers
Ensure Customers Adopt All Your Features
Rapid Onboarding
Maintaining Customer Success Effort
Maximizing Post-Sale Customer Management
Servicing the Customer
Real-time, ROI-focused Customer Success
Average Churn Rate for SaaS
Subscription Churn Rates
Gross Revenue Churn Rates
Net Revenue Churn Rates
Why SaaS Customers Churn
There are almost always indicators that a customer is going to churn, which means that if identified early, a good Customer Success team can mitigate the risk and execute a successful recovery plan.
This is the art of churn management, identifying the at-risk customers who are likely going to churn and using proactive measures to keep them from doing so. It can also mean finding points in your customer journey that usually cause users to churn and proactively improving those in a foundational way.
Some churn is inevitable no matter what business model you employ, but it does not just occur randomly. Think of churn like a risk that can be negotiated like any other.
Churn is usually a result of the customer experience—and you can improve the customer experience in your everyday customer success efforts. Before we dive into churn management strategies, it is important to understand the impact of customer turnover and principal reasons why customers leave.
The customer success practices you use to generate value for your customers also combat churn. Your customer partnered with you to meet specific business goals. If you continually work to achieve these goals, you will build an enduring relationship.
Here are seven of the best ways to reduce churn:
Constantly tracking customer behavior is an effective way to gauge their satisfaction. You should look at customer metrics that link directly to the successful use of your product, such as product usage rates, feature adoption, license utilization, number of escalations, and Voice of Customer feedback and ensuring you have the necessary systems and solutions to do so at scale.
Establishing milestones helps customers see their progress. You should set goals around specific events, such as the timely completion of onboarding, and unique outcomes, such as utilization of a feature you know is particularly useful to a customer. Regularly acknowledging the achievement of these goals lets your customers know you are invested in their success.
Onboarding is a critical phase in the customer journey. Focus on rapidly advancing your customer to the point where they can independently incorporate your product into their daily workflows. The sooner your customer can use your product, the sooner they will see ROI. Be careful not to overload your customer with information and answer any questions they raise.
When customers encounter problems, they look to you for solutions. The first step in relieving these frustrations is to accept responsibility for the problem and provide additional training to address whatever went wrong. Acknowledge their concern with personalized messaging and give the customer a clear path forward.
Your customers should feel surrounded by personalized support any time they engage with a member of your team. Every piece of customer information needs to be gathered, stored, and shared with access for all. This way, the customer never needs to repeat themselves and every staff member is empowered to provide an informed solution.
By staying in close contact with customers, you should be aware of any significant changes to team size, structure, or key personnel. Consider how you will proactively engage a customer when these changes occur. Will you repeat elements of your onboarding program? Will you focus on previous success? Will you stage additional training seminars or make new information available?
Decisions around renewal and churn are not tied to specific dates; rather, they occur throughout the customer journey and are heavily influenced by the overall customer experience. As such, it is vital that you closely track customer behavior day-to-day, week-to-week.
Your customer success platform should draw in information from a range of sources and analyze this data to produce insights that guide your customer engagements. In order to scale your customer success efforts, the platform should include an early-warning system you can customize to alert you of any significant changes in customer health. It should also provide direction from the management or executive team on how to proceed.
The most effective way to reduce churn is to stay informed of customer behavior. If you are aware of any negative trends early on, you will be in a much better position to proactively engage your customer.
The churn management strategies outlined above are effective because they increase the value your company brings to your customer. If your customer is experiencing strong ROI, they are more likely to remain loyal and less likely to lapse.
Following customer success best practices will help reduce your attrition rate. Churn occurs when value declines. Keep your focus on delivering real business value and you will have a loyal customer for years.