Learn tips on how to provide the best experience and build strong relationships with your customers. See what crucial data should be constantly gathered and analyzed in order to decrease churn and improve customer retention.
1. PROMOTERS PASSIVES DETRACTORS
The Leading Reasons for
Customer Churn in SaaS
Why customers pull the trigger and what you can do to stop them
2. 02The Leading Reasons for Customer Churn in SaaS
Churn can be defined
simply as the rate at which
you are losing customers.
churn
3. If you imagine your business as a bucket
with holes, the water flowing from the top is your
growth rate, while the holes at the bottom is churn.
03The Leading Reasons for Customer Churn in SaaS
4. According to Pacific
Crestâs survey, 30% of
Saas companies have
unacceptable levels of
churn
Source: Pacific Crest
30% of Saas
companies
Statistics
04The Leading Reasons for Customer Churn in SaaS
5. While a certain level of churn is
unavoidable, itâs important to keep it
under control, as a high churn rate
can potentially kill your business.
05The Leading Reasons for Customer Churn in SaaS
6. If your business has 100 customers and the
churn rate is 5% per month, you will be left
with only 48 customers in one year.
06The Leading Reasons for Customer Churn in SaaS
7. 80% of your companyâs
future revenue comes just
from 20% of your
existing customers
Top-Line Growth
Existing
customers
07The Leading Reasons for Customer Churn in SaaS
8. Source: Bain and Co.
Reducing churn by merely
5% can increase profits by
as much as 25-125%
Increase Revenue
25
50
75
100
125
08The Leading Reasons for Customer Churn in SaaS
9. 61% of customer take
their business to a
competitor when they
end a business
relationship
Source: Get Satisfaction Blog
09The Leading Reasons for Customer Churn in SaaS
61% of
customers
Brand Loyalty
10. 10The Leading Reasons for Customer Churn in SaaS
The first step in fighting churn is
to understand what causes it.
12. 12The Leading Reasons for Customer Churn in SaaS
Reasons for
Customer Churn
Ignoring data
Poor
onboarding
experience
Weak
relationships
Ineffective
customer
service
14. 14The Leading Reasons for Customer Churn in SaaS
What if majority of your customers are leaving not
because they donât use your product, but because
they don't know how to use your product?
Reason #1: Poor Onboarding Experience
15. In a highly competitive world, a poor onboarding
experience can be costly, as it increases customer
acquisition cost and reduces activation conversion.
15The Leading Reasons for Customer Churn in SaaS
Reason #1: Poor Onboarding Experience
16. 16The Leading Reasons for Customer Churn in SaaS
Thatâs why brands focus on delivering "Aha!"
moments to direct users towards the lower end
of the conversion funnel.
Reason #1: Poor Onboarding Experience
17. The "Aha!" moment is the first user interaction that delivers clarity
on your productâs unique value proposition, and gets them hooked.
17The Leading Reasons for Customer Churn in SaaS
Oh, I got it!
Reason #1: Poor Onboarding Experience
18. For instance, the âAha!â moment for Instagram is
getting users to upload one picture, for Twitter itâs
posting the first tweet, for WhatsApp itâs sending
that first message.
18The Leading Reasons for Customer Churn in SaaS
Reason #1: Poor Onboarding Experience
19. 19The Leading Reasons for Customer Churn in SaaS
As per behavioral psychology, people need "activation
energy" to complete a task that they would rather not do.
Reason #1: Poor Onboarding Experience
20. Thereâs a reason why people find it so difficult to hit the gym in
the morning, but don't mind partying for hours.
The difference lies in the activation energy gap, which is huge in
the morning, since you have to push yourself to wake up early
and hit the gym. However, dancing at a party is tempting,
convenient, and delivers instant gratification - thereby making it
an activity with âlow activation energyâ.
20The Leading Reasons for Customer Churn in SaaS
Reason #1: Poor Onboarding Experience
21. 21The Leading Reasons for Customer Churn in SaaS
When you want a customer to complete a task
theyâre least likely to do (filling forms, sharing
personal information, etc.), you need to reduce
the activation gap.
Reason #1: Poor Onboarding Experience
22. Lay the basic groundwork (minimise initial inputs)
Design walkthrough tutorials (step-by-step product
guides, visual tours, etc.)
Deploy. Test. Repeat (run A/B tests)
22The Leading Reasons for Customer Churn in SaaS
1.
2.
3.
Reason #1: Poor Onboarding Experience
How to reduce the Activation Gap?
24. 24The Leading Reasons for Customer Churn in SaaS
Reason #2: Ineffective customer service
Poor customer service is the one of the topmost
reason for customer churn as it takes a single bad
experience to make users choose a competitor.
25. Source: American Express
25The Leading Reasons for Customer Churn in SaaS
78% of customers bail out
on a product because of a
poor customer service
experience
78% of
customers
Reason #2: Ineffective customer service
26. 70% of buying
experiences are based
solely on how the
customers feel being
treated.
Source: HelpScout
26The Leading Reasons for Customer Churn in SaaS
70% of
experiences
Reason #2: Ineffective customer service
27. While delivering a great customer service is a
clockwork mechanism with lots of components playing
a vital role, there are two key strategies at the core:
Improve Accessibility
Ask for Feedback
27The Leading Reasons for Customer Churn in SaaS
Reason #2: Ineffective customer service
28. Pick the right channels for your customer service delivery.
Emails, chats, and other passive communication channels
are low-cost, low-energy ways for connecting with
customers who have minor issues, while calls and personal
interactions are expensive yet effective ways to address
high-priority issues.
28The Leading Reasons for Customer Churn in SaaS
Reason #2: Ineffective customer service
Solution #1: Improve Accessibility
29. 29The Leading Reasons for Customer Churn in SaaS
Emails Calls
MeetingsWebsites
Live chat
Community
forums
FAQ
Social media
Communication
channels with
customers
Reason #2: Ineffective customer service
30. Source: Genesys Global Survey
30The Leading Reasons for Customer Churn in SaaS
Over 75% of customers are
more satisfied with
assistance by phone. The
second channel of choice is
email communication.
22
59
78
0
10
20
30
40
50
60
70
80
90
Web-selfservice Email Phone
Reason #2: Ineffective customer service
31. Pick the right channels by following three factors:
31The Leading Reasons for Customer Churn in SaaS
Employee convenience
(How easy it is to solve the query through that medium for your customer reps)
Overall turnaround time
(How fast can you resolve the query through the channel)
Relative customer satisfaction
(Using A/B testing to find the channel that maximises customer satisfaction)
1.
2.
3.
Reason #2: Ineffective customer service
32. According to Lee Resources report, 80% of
companies believe they deliver superior customer
service, while only 8% of customers believe that
businesses actually do that.
32The Leading Reasons for Customer Churn in SaaS
Reason #2: Ineffective customer service
Solution #2: Customer Feedback
33. Ask your customers how they feel about your
product or service (survey forms, NPS, CSAT)
33The Leading Reasons for Customer Churn in SaaS
Reason #2: Ineffective customer service
34. 34The Leading Reasons for Customer Churn in SaaS
Reason #2: Ineffective customer service
Close the feedback loop
36. As per White House Office of Consumer Affairs,
itâs 6-7x times more expensive to acquire a new
customer than to retain an existing one.
36The Leading Reasons for Customer Churn in SaaS
Reason #3: Weak relationships
37. 81% of customers are
more likely to stay
provided that they feel
connected with the brand.
Source: SalesForce
37The Leading Reasons for Customer Churn in SaaS
81% of
customers
Reason #3: Weak relationships
38. 38The Leading Reasons for Customer Churn in SaaS
Reason #3: Weak relationships
Be available and connected to your customers through
relevant communication channels
39. 39The Leading Reasons for Customer Churn in SaaS
Tips to help you build strong relationships:
Know your customersâ preferences
Conduct customer exit surveys
Re-engage inactive customers
1.
2.
3.
Reason #3: Weak relationships
41. â The goal is to turn data into information, and
information into insight.â- Carly Florina
41The Leading Reasons for Customer Churn in SaaS
Reason #4: Ignoring data
43. Thatâs why you need to pay attention to what
the data is telling you.
43The Leading Reasons for Customer Churn in SaaS
Reason #4: Ignoring data
44. Analyzing behavioral traits and personalizing
experiences is the key to customer retention
44The Leading Reasons for Customer Churn in SaaS
Reason #4: Ignoring data
45. If the renewal rate is decreasing, dig up the data to answer:
Why the renewals rate is low?
Which segment stopped renewing?
Where did they stop?
How can they be re-engaged?
45The Leading Reasons for Customer Churn in SaaS
Reason #4: Ignoring data
46. Use data to improve customer retention:
46The Leading Reasons for Customer Churn in SaaS
1.
2.
3.
Reason #4: Ignoring data
Track and prioritize feature requests
Personalize experiences
Analyze customer behavior
47. Track how clients
use your product
Personalize customer
experience
Analyze customer
behavior
47The Leading Reasons for Customer Churn in SaaS
Reason #4: Ignoring data
48. 48The Leading Reasons for Customer Churn in SaaS
Step 1: Pay close attention to what your customers are asking, monitor
how they use your product and what obstacles they are facing.
Step 2: Put all improvement ideas on a priority list (easy-to-fix and highly
demanded features go to the top) and pass that list to your product team.
Step 3: Track the interaction of customers with newly developed features
and use early feedback from users to refine product experiences.
Reason #4: Ignoring data
Track and prioritize feature requests
49. Personalization not only increases conversion, but
also improves user engagement as users spend less
time finding features and more time interacting with
those features.
49The Leading Reasons for Customer Churn in SaaS
Reason #4: Ignoring data
Personalize experience
50. 50The Leading Reasons for Customer Churn in SaaS
Reason #4: Ignoring data
Analyze customer behavior
The best way to reduce customer churn is to
analyze how your customers interact with your
product and optimize your service for desirable
customer experience.
51. âą Improve your onboarding experience, always be
available to assist your customers and build strong
relationships with them.
âą Pay attention to all the data generated
by how your customers interact with your product.
51The Leading Reasons for Customer Churn in SaaS
Conclusion
52. Net Promoter ScoreÂź makes it easy to identify
your brand detractors by asking one simple
question:
On a scale of 1-10, how likely are you to recommend
the product experience to your friends or colleagues?
Know What Your Customers Think About You
52The Leading Reasons for Customer Churn in SaaS
53. Retently Sentiment lets you track customer
satisfaction, improve retention and decrease churn.
53The Leading Reasons for Customer Churn in SaaS
Know What Your Customers Think About You
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