If you do a search for “SaaS churn reasons” you will see some great articles and pick up some useful advice about combating churn. Many articles will point to “lack of value” as the root of most churn. And they are right. In most cases if a customer doesn’t receive value, they will not continue to use a product. That’s not unique to SaaS, that’s just common sense.
When diagnosing and fixing churn issues you have to dig deep into the value you are delivering, how you are delivering it, how self-evident it is and what type of impact you are making on your customer’s lives or businesses.
But that effort isn’t a magic wand. And it’s not always the fastest path to improving your retention.
When working to improve customer retention, in addition to evaluating the overall value a product is delivering, I think it’s also important to take churn reasons at face value. I worry that industry advice is to dig into “customers getting value”, because it skips over the very obvious. Look at the reasons customers say they are churning and do something about it.
Often, when a SaaS executive shows me their churn numbers and I ask what they are doing to address the top reasons, the answer is surprising.
Surprising, because while the answer includes many worthwhile initiatives, they aren’t designed to attack the top churn reasons head on with urgency. And churn has to be solved with urgency.
Yes, customer churn can and should be solved with systemic, strategic changes. But customer churn also needs to be addressed tactically, urgently and practically, not just systemically. Otherwise, too many days (then months, then years) slip by as revenue walks out the door.
Here are a few examples of what I mean.
Customer churn reason: “Not enough time”
If you are surveying your customers when they cancel, it’s likely that a lot of them give lack of time as the reason. Customers sign up with the best of intentions, and then real life & real work get in the way, onboarding gets delayed, your product keeps moving down the list of priorities, and your customer realizes they simply don’t have enough time to use your product.
What to do: Get creative. Build a “quick start” with pre-configured options. Provide professional services and use your product on behalf of the customer, so they can still achieve the desired outcomes they want. Create shorter, smaller versions that require less time investment. No matter your product, I am pretty sure there are time-saving things you can incorporate.
Customer churn reason: “Didn’t use it”
I threw this in as is a trick reason. When you ask customers why they aren’t renewing, don’t have this be choice. You should already know they didn’t use it, and you should have been helping them to adopt from day one.
What to do: Don’t make your customers tell you they didn’t use the product—automatically surface engagement...