Four ways to lower SaaS customer and revenue churn

When it comes to SaaS metrics, customer and revenue churn are some of the most impactful outcomes on your bottom line, valuations, and marketing and sales.   

If you struggle with high SaaS churn rates at your SMB or Enterprise, it's important you analyze who's at risk of leaving, who has already left, and how you can prevent any further losses. 

Assess how your customer-facing teams contribute to churn

Calling customers who are “at-risk” of churning is never an easy feat. Before conducting your phone call, it’s always important to have a set number of questions to ask over the phone in planning for a worst-case scenario – churn.

You’re looking to pinpoint where exactly it went wrong, so think about areas you’d consider such as Sales, Customer Service/Support, Product and Marketing.

Below are some examples of why your customers churn:

Sales

• Poor product-market fit (PMF)
• Sales pitch/process didn’t work
• Not the right lead to go after
• Your pricing tier didn’t match their needs in the long run

Customer Support

• Lack of proactive support
• Lack of SaaS onboarding
• Slow reaction time to support queries
• Unreachable/difficult to reach for support or queries
• Low satisfaction rates on customer service

Product 

• Too many bugs
• Unfriendly user experience (UX)
• Subpar user interface (UI) design
• Perceived value during sales didn’t reach customers expectations

Marketing

• Inbound/Outbound initiatives didn’t attract the right customers
• MQLs weren’t set right and wrong leads were sent to the BDRs
• Messages weren’t segmented to the right customers

Evaluate different factors driving churn rates 

Now that we have the areas in mind, It’s now time to have a set number of questions ready in the bank, to help you gather useful information that will help you and the team uncover issues your customers are currently experiencing.

Below are just some examples conceptualized in relation to the four customer-facing segments:

Sales

• Did we meet your expectations since the initial meeting?
• Did our software reach your expectations?
• What was the aim of investing in our software?
• Why did you choose us over our competitors?

Customer Service

• Were you happy with the level of support received whilst using the software?
• Did you find us easy to get in touch with?
• Was the training you received helpful in teaching you how to use the software?

Product

• How did you find the overall layout of our software?
• Was it easy to navigate through the software?
• What features were missing from our software?
• What features were the most valuable to you?

Marketing

• Do you find the tutorials/videos on our website helpful?
• Have you found any of our blogs helpful when you’re unable to reach support for a certain issue?
• Did you get a chance to sit in our webinars? What did you think of them? 

Ask your customers about their experiences

Before conducting the phone call, it is strongly recommended to go through your Customer Relationship Management (CRM) software or spreadsheet, or wherever you’re currently saving all that precious data that is tied to that one customer. It is a great way to learn about your customers, providing a strategic advantage before the phone call. Look into things such as:

• How long has he been a customer?
• Has he had any previous negative experiences with us?
• What positive interactions has anyone had with him?
• Who sold him the subscription?
• Has he been onboarded and trained to use the platform?

How to talk to customers at-risk of churning

The aim of the game is to figure out why your customers aren’t happy with your service/software. Just like any call you’d make to a friend remain friendly, polite, empathetic and open-minded. Start with an opening line in asking how they’re doing. Then think about how you’re going to frame the question to your customer, for example:

I noticed that you haven't been using (XYZ) lately, do you need help in setting that up or require further training at all?

The response can either go two ways: 

1. He is no longer using your product and you calling him has just reminded him to cancel;
2. He doesn’t know how to use it.

If the answer is 2, then it's an easy fix - set up a date and time to either conduct a training session over the phone or through a webinar. However, if the answer is 1, then it gets tricky. So, it’s time to bring out the big guns and get ready to ask those difficult questions you’ve framed.

Always end the call with an apology and an open invitation to use your services should their or your company's situation change in the future.