The C-Word and What SaaS Leaders Can Do About It

Any of these problems sound familiar?

1. Haemorrhaging Money

Churn can crush your company’s bottom line. And it’s a double penalty- you lose both the money from the subscription and the money it cost to acquire that customer in the first place. Then you have to shell out even more money to get a new customer to replace them.

2. You Lose Your Fans

Happy customers are free advertising (wow, something that’s free!). In fact, word of mouth successfully converts new customers more often than anything else. But when customers leave you, they’re not singing your praises. They’re probably talking smack behind your back.

3. It Crushes Morale

The SaaS industry is high-pressure for its teams. But churn can make them wonder why on earth they’re working so hard- especially if they’re in a customer-facing role. Churn causes frustration. Churn robs workers of their confidence. And that spreads among your teams.

4. Impact on Growth Metrics

Churn cuts growth metrics like Monthly Recurring Revenue (MRR) and Annual Recurring Revenue (ARR) which are necessary to assess growth. They’re also what those stakeholders focus on in those board meetings. It’s hard to assure them about future growth and stability when those growth metrics stagnate or decline.

5. Invest-ability

It’s hard enough getting funding at the best of times. But high churn rates deter potential investors even more. Investors need to see that your SaaS company keeps its customers over the long term because this is a good indicator of product-market fit and potential profitability. Churn makes a company feel and look unstable.

The last thing you want your SaaS business to feel is unstable. There’s too much pressure and competition in the SaaS landscape as it is.

So it’s time to tackle churn once as for all, so that you and your teams can enjoy building your customer base and scaling as much as you want.

Causes of Churn

It’s hard to tackle churn without knowing what it comes from.

One of the biggest challenges about churn is that customers don’t give you a Von-Trapp-family-singers-so-long-farewell song. They’re just gone.

Then you blink and another one’s gone.

Then you blink, and tons of them are gone before you had a chance to figure out what’s up.

So what are the causes of churn?

What to do about churn

There are a lot of different things you can do to cut churn for good.

SaaS companies like to do things that are unusual and innovative – it’s at the heart of how we see the world. So this list has more unusual strategies as well as the time-tested ones.

1. Improve Customer Onboarding

Clear and easy onboarding is so important if you want to set up customers for success from square 1. Give them the help and resources that they need – demonstrations, tutorials and any other content that helps them use your product to its full potential.

2. Get to them first

We get that resources can be strained, but it’s important to never wait to reach out until there’s a problem. Check in. Do they need anything? It’s better to sort out issues before they blow up.

Boost the product: Continually work on that product using customer feedback and advice not only gives you a stronger offering, but shows your customers you care about their success.

3. Design a customer success program that develops their goals

Your customer’s success with their products is key to your success. Help them achieve their goals while using your product. Personalized support, a learning academy, and extra resources will help them achieve their goals. Why would they leave?

4. Get flexible on the pricing

Customers love flexibility. They want options. They need to stay in their budget. Different pricing tiers or usage plans will both cater to a wider range of customers and accommodate their changes in need.

5. Yeah, the AI

You don’t have to fear AI – it’s here to give you info on user behavior data to help you predict when customers are likely to run. This helps you up your game before they even think about leaving.

6. Share the Love with Customer Success Stories

Who doesn’t love a good success story? They bring your customers and your products to life. Share their personalized success stories. Make them customer ambassadors. This creates a sense of community and loyalty.

7. Give ’em a Break with ‘Pause Instead of Cancel’ Options

We’ve all been at a point where we just need some breathing room (usually after we’ve been around a Neapolitan pizza). Not a lot of companies do this, but give your customers a chance to pause instead of cancel your subscription. This gives them the flexibility they need, but keeps them in your world.

8. Make them feel like partners with co-creation

Involve your customers in product development. Their insight is invaluable! They’ll also get emotionally invested in your brand, and become loyal. It turns customers into die-hard fans.

9. Wow Them with Augmented Reality (AR)

Are you ready to push things from possibility to reality? AR can make your product tours fun and interactive. They help customers understand and love your product too. And how many people will they tell about the experience?

10. Show you care with social responsibility

It’s a fact – customers love brands that care. Social responsibility initiatives build trust with customers, making them think twice before leaving.