There’s a lot that churned customers can tell us—specifically how to stop churn from happening in the future.
Don’t forget about your churned customers. Even though they’re gone, your churned customers can still “speak from the grave.” This is why it’s important to study your former customers to analyze what went wrong. By pinpointing what led to their departure, you can correct issues and improve your current customer’s journeys (and your retention rate).
In this post, we’ll help you identify churn-risk customers. Plus, we’ll give you actionable tips to rescue them from the brink of churn. Let’s get started.
Two types of churn
There are two types of churn to look out for.
The first type of churn is voluntary. The customer makes a conscious decision to leave your SaaS. Perhaps they were dissatisfied with your service or they found a better deal/ fit elsewhere.
The second type of churn is involuntary. This happens when a customer’s payment fails. Perhaps they didn’t update their credit card information in time and it expired. Or maybe something went wrong on your end and the payment couldn’t be processed correctly.
This type of churn is worse than voluntary churn because it’s often-times preventable.
Whatever the cause of churn, here’s the bottom line: Churn will happen.
And while it’s inevitable for every business, churn is not always a bad thing. Sometimes, a customer doesn’t fit and it’s better for both of you that they move on to a more compatible solution.
Churn won’t devastate your business as long as you’re able to do two things:
- Keep your churn rate low
- Bring in new customers who are able to meet or exceed the amount you’ve set as your ideal customer lifetime value (Here are tips on how to calculate your customer lifetime value)
That’s good news about churn. But here’s even better news: There’s almost always something you can do to protect your SaaS against an unacceptable rate in churn.
The good news about churn is that there’s always something you can do about it. You’re never without a remedy.
What are the tell-tale signs that a customer will churn?
You can’t focus only on customer acquisition. To reduce churn, you must also keep an eye on your current customers. If you spot any of these warning signs, jump into action immediately.
1. Decreased Activity in App
When your customer stops using your app as frequently, it may mean that churn is imminent. This is especially telling if the activity steadily declines over a specific time frame. (This time frame is different for every SaaS, but usually follows the billing cycle, whether that’s 30 days or 12 months, etc.)
2. No Email Opens
Has your customer stopped opening your emails? Perhaps your emails are not relevant to them. Otherwise, reduced email opens mean that the customer doesn’t value your content. Ouch. But don’t worry, there’s a way to fix that. Check out this post on 10 easy ways to improve your SaaS email marketing strategy.
3. Open Tickets
When a customer has a problem with your product, they may self-remedy through your knowledge base or they may reach out to you directly through your customer service. While it’s good that they haven’t “given up” on you yet, it’s bad because they’re obviously frustrated with your service. Frustration can definitely lead to churn if you’re not careful with how you handle and solve their problem.
4. Customer Complaints
Sometimes, a customer doesn’t want to solve their problem. They simply want to complain about it. Any customer who complains is at risk of churning. Churn is not inevitable, though. You can turn their frown upside down and get them excited about your service. We’ll discuss how in the next section.
5. Social Media Sentiment
Some customers may not complain directly to you. Instead, they may use social media to air their grievances. Invest in a social media listening tool, like Sprout Social or Buzzsumo. Always be aware of what people say about your brand.
Downgrading can be a sign that your customer is on the brink of churning.
7. Change in your client’s company
If you’re a B2B SaaS, changes within your client’s company can spell disaster. Changes include a key contact leaving the company, the company merging with another, or news that the company is downsizing. All of these indicate “churn-risk” with neon lights.
How to Reduce SaaS Customer Churn
Now that you know what to look for, here’s how to reduce churn and improve the relationship between you and your customers.
Eliminate Involuntary Churn
Involuntary churn, in the form of expiring credit cards and declined payments, can be solved by using a failed payment recovery service. Here at Stunning, we’re the leader in Stripe failed payment recovery for subscription businesses. Since 2012, we’ve recovered over $6 billion for SaaS just like yours. Try Stunning for free now.
Survey Your Customers Frequently
What’s the easiest way to find out how your customers feel about your service? Simply ask them.
Survey your customers frequently (at least three times a year, every four months). This way, you can find out what your customers are thinking.
Here are two easy surveys you can use to gauge customer sentiment:
- A Net Promoter Score (NPS) survey – This survey asks customers to rate their experience on a scale of 1 to 10.
- A custom open-text survey – Ask open-ended questions with the goal of getting answers in your customers’ own words. (Keep it to five questions or less).
The goal behind surveying your customers isn’t just to check on customer sentiment. It’s crucial that you put their feedback into action. If your customers tell you about an issue, make an immediate plan to address it. Not everyone will complain. Some people will just walk away.
Keep an Eye on Review Sites
Some customers may not complain to you directly, but they will complain on forums or review sites. Get involved in the top review sites for your industry. Monitor comments and respond whenever appropriate. Remember that your public response isn’t just for that irate customer, but also for potential leads who may be watching how you respond to others.
Make Onboarding a Priority
Start your relationship off on the right foot by providing non-stop value in the beginning. Teach your customers how to use your product. This includes giving new customers a tour of your product and giving them personalized advice on how to meet their intended objectives.
Proper onboarding creates product stickiness. Take it seriously because this is one of the best ways to reduce churn.
Offer Excellent Customer Service and Success
Your customer care shouldn’t be reactive only. It should also be proactive. Reach out to your customers before they reach out to you. Ask them what their goals are with your product. (You can do this through surveys and then segmenting based on their answer.)
These are the three types of customers to reach out to first:
- Your ideal customers (people who you want to continue to do business with)
- Customers who are teetering on the edge of dissatisfaction with your service
- Your newest customers
When reaching out to your customers, offer free, personalized support to ensure that they find success with your product. Your customers won’t forget this personal touch and it will help them stick with you, even if they were unsure before.
Churn happens to every business, but you can minimize it. Use the above tips to identify the customers who are getting ready to churn so that you can turn the tide in your favor.