7 Strategies to Reduce SaaS Churn

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7 Strategies to Reduce SaaS Churn

June 15, 2014 by

With the cost of customer acquisition on the rise, many companies are looking to reduce their SaaS churn. Here are 7 strategies for keeping your current customers, making them successful, and reducing your churn rate:

1. Make it Official

Nothing brings light to a subject like naming it and letting the whole team know that it’s important. Give customer retention and it’s evil twin, churn, a place on the dashboard, the company objectives and bonus structure.

2. Measure Customer Engagement

Measure customer engagement for each customer, understand what makes for a successful customer, and what factors influence churn. Once you have this information, you can address it in the product/business as well as with each individual customer.

3. Prepare the Prospect

Even before they’ve signed on the dotted line or begun the free trial, future customers need to be prepped for how much time and effort it will realistically take for them to achieve success with the product. We aren’t in the world where you can sell $2M of shelfware and move on. Over-promising on your website, in your customer acquisition funnel, and in the sales pipeline will cost you after adoption has begun.

4. Be an Adoption Agency

One of the most important and equally overlooked phases of a customer lifecycle is the new customer on-boarding process. Don’t relegate customer success and adoption to over-tasked, under-trained, entry-level teams. This can lead to what Michael Gentle describes as “a misalignment between cost and value.” Assuming the value is there and the customer wasn’t sold “vaporware,” it’s critical that new users be trained how to fully utilize your product to achieve customer success.

5. Do a Cohort Analysis

Jason Cohen has an excellent article on several ways you can analyze your churn data. By segmenting your customers into cohorts, you’ll be able to identify more actionable trends. Instead of simply looking at when they cancel, consider calculating their “time to cancel.”

6. Act on Customer Engagement

Earlier we described the importance of measuring customer engagement and identifying the type and level of engagement that resulted in the most successful customers. Once you have this data, it’s important to act on it. Customers that show behaviors that indicate they are not on a path to success need attention. This attention might be a triggered email with a specific video tutorial or a friendly call from their account manager who received notification of the issue. By acting on engagement metrics, you can trade out your churn stats for customer success stories.

7. Give Value Reminders

Lastly, Lincoln Murphy recommends making it easy for a customer to leave if they really want to, because by that point “you’ve already failed.” The more hoops you make them jump through to cancel, the more frustrated they will be with your company (and you want to avoid those social posts disparaging you as they leave).  

Instead, look to remind the customer why they signed up in the first place and what is at stake if they leave. Not only is their data at risk, but their time invested into the product too.

Read more:

3 Simple Steps for Reducing Customer Churn

Personalization Across the Buyer’s Journey [Infographic]

How to Calculate the ROI of Personalization for Improving Customer Success

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