What is churn management? Are there any two words that SaaS companies hate more than customer churn?
The good news is there are several tips and tools, like Baremetrics, to improve customer experience and customer satisfaction, measure and analyze churn, and develop strategies to put an end to churners.
Click here to start a free trial with Baremetrics today to see all of the ways we can help you.
If you're dealing with a high churn rate, you're in the right place. In this post, we will go over some of the top strategies for effective churn management that lead to high customer retention rates and profitability.
Why Are Customers Leaving?
You can't stop existing customers from leaving or subscribers from unsubscribing if you don't know why they're deciding to pull the plug.
Therefore, we recommend adding a short survey to your cancellation flow to ask customers to give you a concrete reason for their departure. This will provide you with some excellent insight into the causes of customer churn.
When you start getting responses, you can start to look at the data and make the necessary changes to stop it. Make sure you customize the cancellation reasons in your survey based on your product.
At Baremetrics, our Cancellation Insights create questionnaires for customers to answer before they close their accounts. If you want to start a free trial using cancellation insights, click here today.
The following are some examples that customers choose prior to leaving:
- Product/service is too expensive
- They are switching to another product
- The company is shutting down
- Technical issues
- They are unsure how to use the data & tools
- Product/service is missing features they need
To find out more about why your customers are leaving, you can also step up your game and do a cancellation interview. Check out this guide for more on cancellation interviews!
Want to Reduce Your Churn?
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Transparency has become increasingly important in recent years, as people get used to being able to "Google" anything by having instant access to friends, family, brands, and even the world's biggest stars, all thanks to social media.
Customers are likely to stick with a business during a brand crisis if it has a history of being transparent.
You can increase your transparency by openly sharing your business metrics, from revenue to churn and many others. This is an added level of transparency that helps your valuable customers build trust in you.
Recover Failed Payments
Failed payments such as, when customers' credit card payments don't go through, can undoubtedly cause companies to lose out on a lot of revenue.
We recently analyzed some data and found that, on average, SaaS and subscription companies lose around 9 percent of their MRR because of failed payments.
Current customers aren't waiting around checking their payments in anticipation that it will fail so that they can make their payments. When they realize their payment has failed, they may abandon the sale forever.
That is why a system to handle failed payments immediately is critical to fighting customer churn. We recommend using a dunning tool rather than manually attempting to capture failed payments from customers' credit cards.
A dunning tool can automate the entire process for you. Several types of dunning tools are out there, many of which are built right into your subscription billing software.
Use Customer Segments to Analyze Customer Churn
One of the hardest challenges of reducing a company's churn rate is figuring out where to start when it comes to churn management strategies.
Is it spread across customers from each plan you offer?
Is it the customers who signed up with a coupon who are churning the quickest?
To find out, you must use customer data to analyze your churn by customer segments or cohorts.
These customer segments are different ways for you to group customers, i.e., by their location, plan level, and so forth. Since the majority of SaaS companies use multiple pricing plans, that's an excellent place to start.
Create an Onboarding Program that Sticks
You will never develop a strong customer relationship if you leave them to their own devices.
The customer relationship building should start with a magnetic onboarding program where you walk them through the steps of getting started.
Ensure that you answer any questions that may pop up from your customers and reinforce the product's value to them or their company.
A strong onboarding program will ensure customers don't simply sign up, try the product once, and abandon it forever. They will ensure that they provide answers on how the product can benefit them.
If you’re curious about how your churn stacks up with similar companies, our Open Benchmarks show you average churn rates based on average revenue per user.
Use Baremetrics to Decrease your Churn Rate
All of the above ways to curb customer churn are examples of what Baremetrics can do for SaaS companies that will lead to higher customer success, customer retention, and less customer churn.
Baremetrics will provide you with all of the information you need straight from our dashboards; then, it exports data into a spreadsheet to allow you to analyze and modify it further.
Baremetrics has tools that will help you keep new customers satisfied and impressed with your product and service and turn them into loyal customers.
For more information on how Baremetrics can help you kick customer churn to the curb, click here for a free trial.