How to avoid churn

SaaS companies have to invest heavily in sales and marketing to win new customers. And, since they get paid a monthly subscription, rather than a large, one-time payment, it takes a long time for customer relationships to become profitable. Practically speaking, that means that avoiding churn is of the utmost importance. Not only is it six to seven times more expensive for companies to attract new customers than it is to keep existing ones, when SaaS businesses experience high levels of churn, reaching profitability becomes virtually impossible. 

Of course, some level of churn is inevitable. There will always be customers who will stop doing business with you, no matter how much effort you put into keeping them satisfied. But if your customers aren’t getting the results they’re looking for or don’t feel they’re getting the support that they need, you’re practically inviting them to leave. 

So what does it take to prevent churn and retain your customers from month to month? Let’s look at some of the key tactics you should consider using.

Improve your user onboarding process

From the outset, it’s important to ensure that you’re setting your customers up for success with your product. Getting started with a new product can be stressful and overwhelming, so it’s important to support customers throughout the process. Establishing a solid, thoughtful onboarding process and roadmap to help ensure their success is vital to keeping them on the right track. They’ll need you to guide them through your product’s features and functionality, so that they know how best to use everything to get their desired results. That way they’ll not only feel empowered, but have a clear understanding of how your product can help them achieve their goals.

Be proactive with communication

By reaching out to your customers before they need you, you’re showing them that you’re committed to helping them get the most out of your product. However, don’t think that just any kind of boilerplate outreach will do. What and how you communicate with them should be directly tied to the stage they are at in the customer experience. If you see, for example, that a new customer isn’t using all of the functionality that’s available to them, you might send them a message with resources that can help them leverage parts of the product they haven’t experienced.

Communicating your product’s latest features, updates, and improvements can help keep customers active and engaged, while also showing your commitment to continued improvement on their behalf. Promote two-way communication by proactively communicating with customers about how they can best use your product. Webinars, Q&As, and case studies, for example, can be very effective in engaging customers and demonstrating that you care about helping them succeed.

It’s also important to listen, solicit feedback, and identify blockers. Doing so gives you a head-start on identifying issues before they occur, and the ability to provide solutions before future customers realize they have a problem. 

Offer incentives

It’s not enough just to help your customers utilize your product in the best way possible. To keep them on board, you also need to sweeten the deal. 

Developing additional tools and features, and offering them to your customers free of charge, shows that you value them, and want your product to continue to be the best solution for them. Helpful webinars and educational tutorial videos can both improve your client’s experience of your product and build trust. Other methods you might want to consider include offering a promotion, discount, or loyalty program. Think about where the customer is in their journey. If they’re approaching the end of their contract, a discount on renewal could secure them for another term if they’re on the fence.

Analyze churn when it happens

To really understand and prevent churn, you need to know why it’s happening so that you can build strategies to proactively retain your customers. Try to identify the point at which customers leave you most often. Is it after the free trial ends or when it’s time to renew their contract? Once you know when they tend to leave, you can identify the points at which you need to intervene. Are the customers who leave using all of the features of the product that are available to them? If not, offering additional help and guidance and re-engaging with them could stem the flow.

Another useful tool is feedback. Ask them why they’ve decided to leave or cancel. Is it cost, unsuitability of the product, or lack of support? Once you have a fuller picture as to why they are jumping ship, then you can implement intervention strategies to prevent it.

Keeping your customers for life

If you want to keep customers from churning, you have to work hard to please and delight them at every stage of their journey. Just because they’ve signed up with you, doesn’t mean they won’t be willing to move to a competitor if they feel they’re not valued or if they find your organization difficult to deal with.

Always look at winning customers as the first step in a lifetime relationship. Like any relationship, it requires ongoing work and attention. Become complacent and your customer relationship probably won’t last as long as you’d hope.