SaaS User Retention 101: 4 Tactics To Reduce Churn Rate

Arooshi Arooshi
Jun 18, 2021 4 min read
SaaS User Retention 101: 4 Tactics To Reduce Churn Rate

When it comes to running a business, churn rate is one important aspect. This refers to those once-loyal customers who have now stopped doing business with you, for whatever reason, usually pertaining to dissatisfaction with your customer service. If you want to keep your customers and maintain positive and good ranking with your business, then you’ve got to address churn rate and keep it as low as possible.

Churn rate is a very important metric for you to be so cautious about, for the very reason that it costs so much for once-loyal customers who once were pleased with you to stop doing business with you. When you lose these clients, it means you’re losing the profit that they would’ve brought for your business. Then, along with losing that profit, now you’ve got to double-time with your marketing, so you can gain new loyal customers in place of those who left.

With that said, here are proven tactics on how you can achieve a lower churn rate:

1. Reach Out To Your Customers

Reaching out to your customers mean asking for their insights on their feedback about your company. Is there anything about your business that your customers are dissatisfied about? Being that poor customer service is the top most reason for high customer churn rate, when you reach out to them, you can ensure that whatever it is that’s keeping them dissatisfied, you’re able to address and solve effectively.

Typically, the response of customers when you reach out to them is going to be positive. This doesn’t necessarily mean good comments all the time, but they’re more than willing to give their honest insights so you can improve. Once you’re able to achieve these changes and make it operative, you’ll find a significant decrease in your churn rate.

Plus, gaining insight from your customers is now easier than it has ever been before with features on your website, apps, and software like forms, feedback lists, and a feature request tool, among others.

2. Provide Additional Services To Your Customers

Yes, you may have excellent products and services, but if your customers aren’t able to make full good use out of these, then the tendency is that your churn rate is still going to be high. Because your customers don’t know what to do with your products and services, they might find it ineffective when in fact, they just didn’t have the assistance needed to be able to use those products and services to its fullest—and accurately, at that.

So if you haven’t already been doing, it’s a good idea also to provide additional services to your customers. For instance, you’re releasing a new product or service. Don’t just stop there. Make it a part of your customer service as well to provide tutorials and tips, a guide, or a public roadmap, for instance, by using those specific tools.

When you do this, your customers will now know how to make good and full use of your products and services and, therefore, be more attuned with staying with your company and continue being loyal patrons of the products they’ve been buying regularly from you.

3. Analyze Why Churn Happens In Your Company

Apart from reaching out to your customers, you’ve also got to understand why you think churn happens in your company. This is a very important step for you to undertake as there’s never a one-size-fits-all approach to customer churn. This means that customer churn can happen for so many reasons, depending on the respective weaknesses and flaws that you may have as a company.

Typically, however, some of the common reasons for customer churns are around the likes of the following:

  • Lack Of, Poor, Or Zero Engagement: This is usually characterized by factors like while your products may be used and patronized, it’s not done so as frequently as it should be or that your customers aren’t making the full use of patronizing your products and services.
  • High Product Bugginess: This happens to those businesses who are in the tech industry, whereby their software and other products are always usually laden with bugs. Customers who depend on your products and services for a smooth flow in their operations don’t like it when they’ve got to deal with regular bugs in your tools or services.
  • Lack Of Proactive Support: This is a common characteristic as well of poor customer service, which means that customers aren’t being given the support that they need when they start to experience troubles with your products and services, particularly when trying to access your e-commerce website.

4. Identify ‘At-Risk’ Customers

Identifying the ‘at-risk’ customers means you’re able to successfully brand or label those customers whom needs your attention the most, as they’re at the highest risk of leaving your company in favor of another.

This is a proactive approach that can enable you to not just lower your churn rate but also avoid churn from happening again in the future. Remember that not all customers are equal and alike. There are those who are more highly likely to leave than others are. It’s to your advantage to know who these are so you can balance out, reach out to them, and do all that you can in your campaigns and customer service to make those customers stay.

With technology and data easily available to businesses today, identifying who these at-risk customers are is easy. Focus on those who haven’t contacted you back after asking for a quote of certain products and services that you may be offering.

Conclusion

In running your business, you’ve got to be able to understand that preventing customer churn is the way to improving your business revenue. This is one of the most important metrics that should give you insights on your overall performance as a business. If you find that your churn rate is high, then it should also serve as motivation for you to do all that you can to lower this metric. The lower your churn rate, the higher the likelihood that your business is going to improve well, especially profit-wise.

The tips in this article should help you effectively lower your business’s churn rate. But don’t just stop there. Once you’ve already lowered it, be sure to keep it that way so you won’t have to keep scrambling with worry about losing loyal customers left and right again and again.

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