Understanding how to reduce churn is critical for sustainable SaaS growth. SaaS businesses focus so heavily on metrics, numbers, and trends that they can forget the reason for their success: the customer.
Long-term users are often the best customers. SaaS growth strategies should be designed to keep a customer for as long as possible. Retention is about more revenue–it’s also an effective way to reduce customer acquisition costs, which can be especially high for startups and small businesses.
How can you improve your retention rate? By providing a great customer experience.
Customers have instant access to thousands of products and solutions. Great customer experience will help people distinguish between those companies–and build trust in their offerings.
8 Ways to Reduce Churn and Create a Great Customer Experience:
- Personalized onboarding
Begin your retention-focused customer journey with a personalized onboarding experience that introduces users to the product and reduces potential user errors–and related support tickets. Onboarding can involve dedicated training and support, videos, and personalized communication to get users started.
- Pricing flexibility
Give users the option to switch between price options and services, like a free, limited version and a full product. This will help get more users in the door and prove the value of your solution. Building sustainable relationships with a loyal audience this way will support both conversions and retention.
- Ease of cancellation
Don’t make users jump through hoops if they want to cancel. Make your cancellation policy easy to understand and easy to find. Less frustration in subscription management can reduce churn in the long-term by improving the chances of the user returning.
- Billing transparency
Companies should have clear and straightforward billing practices to maintain customer trust. These should be established prior to onboarding, and any later updates should be given with proper warning, because surprise fees or unexpected price increases will erode customer trust.
- Usage tracking
Identify customers who are at risk of churning by tracking how often they use the product or service. Have conversations with your customers and seek feedback regularly. This will help you understand their needs and how you can improve their experience by identifying areas where your product can expand and grow.
- Trigger marketing to improve engagement
Trigger marketing instantly connects with new leads when they engage with your platform or content. Regular updates about new features, helpful tips and tricks, and resources to help users make the most of your product improves engagement and upsells the experience. Reaching out to users at specific times throughout the customer lifecycle, such as when a user hasn’t logged in for a long time or when a new feature is available, is an effective way to reduce churn.
- Seamless payment experience
Keeping customers engaged is one thing–delaying their check out time is another. Providing a smooth payments experience is one way to keep customers satisfied because it supports accessibility and personalization overall.
- Payment recapture
Unfortunately, even the best customer relationship strategies can hit a snag–on average, SaaS companies face about 5-10% customer churn. This can be for a variety of reasons, including payment failures. 10% of ecommerce payments failed last year. This contributes to involuntary churn as it often preemptively ends a customer’s subscription.
Credit card companies and payment gateways might offer card update services to help businesses maintain up-to-date credit and debit card information. The card account updater automatically puts the new card details in the company’s system when a customer’s payment information changes because of card expiration or renewal. This helps reduce churn caused by accidental missed payments.
Summary
Reducing churn and increasing customer retention is the most effective way a SaaS company can ensure growth–and a solid customer experience is essential to maintaining that loyalty. Companies will continue to succeed if they stay focused on the customer and take these steps to protect these valuable relationships.
Want to learn more about successful SaaS growth? Check out our recent Founder Feature–Redefining B2B SaaS with Affiliate Marketing.
Leanne Beattie is a writer for FlexPay, the leading failed payment recovery platform for subscription, membership, and recurring revenue businesses. They solve involuntary churn, preserve your customer experience, and drive more revenue.
