Double Your Customer Value: 7 Ways to Reduce SaaS Churn

Josh Pigford on June 18, 2014

When you’re a brand new business, churn is generally something you don’t need to worry about. Or rather, there are probably bigger wins than trying to figuring out how to reduce churn by a few percentage points.

But eventually you’ll have to face it. Growth will eventually taper off and churn will become a major issue to tackle.

If you’d like an intro in to what churn is, the different types of churn and why paying attention to it becomes of such a big deal, check out Slaying the Churn Beast from the SaaS Metrics Academy.

I’ll assume you’re already familiar with what churn is, so we’ll jump right in and take a look at a few ways you can reduce both revenue churn and user churn for your SaaS.

Identify the source

To reduce churn, you need to know exactly why it exists at all. Start by talking to customers who cancel. Don’t just send them some exit survey…actually have a human conversation with them like real humans do. Having actual conversations lets you pick up on intricacies in their explanations that you otherwise would miss by reading form field entries.

Also, identify some key metrics that indicate someone may be churning soon. Alex Turnbull calls these “Red Flag” Metrics. They’re certain actions (or lack of) that your churned customers have in common that can help you predict if someone may be churning soon. This gives you a list of customers that you can reach out to and hopefully mitigate them churning at all.

Increase engagement

Engaged users don’t churn. Customers using your product on a regular basis are doing so because they get value out of it. But as soon as their engagement starts dropping off, they’re much more likely to churn.

Give your customers reasons to keep coming back. Provide a way for them to get value on a daily basis. This could be in the form of a daily report showing them what’s changed/happened in the last day or showing them a list of things to do in the coming day. Provide something that makes you part of their daily workflow.

Help them succeed

When you’re building products for other businesses, a major way to keep them from churning is to make them successful. For example, with Baremetrics, as long as we’re helping people understand and know what to do with their metrics, we’re helping them build better businesses.

By providing solid metrics and giving insight in to why their metrics are what they are, we help them run their businesses better.

It may be your tool that’s specifically helping them, or it could just be great customer service.

Become part of the company workflow

I touched on this earlier: make your product part of your customers’ daily workflow. More specifically, make your product part of the workflow of their entire company.

The fastest way to do this is by having multi-user support in your product.

When multiple people within a company start getting value out your product, it’s much harder for them to churn. You’ve become part of an entire organization’s or department’s toolset…and people don’t like changing tools.

Attract the right audience from the start

All the tips in the world won’t matter if you’ve been attracting the wrong audience. This is a big reason why leading with “free” or “cheap” can backfire on you.

When the first interaction with your company is anchored by “free,” you’re attracting customers who aren’t looking for the value you provide.

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Attracting an audience that’s primed to not only receive but also understand the value they’re getting means you’ll have a much easier time down the road conveying that value.

Convey the value

Speaking of conveying value…it happens to be a great way to reduce churn! Show your customers on a regular basis the value you’re providing or the pain that you’re solving.

One way we do this at Baremetrics is via a daily/weekly/monthly summary email. Most users regularly receive this email that shows them how their business is doing.

The emails not only give them information they want to know, but also tend to have an “I love getting this email from Baremetrics!” reaction…and you want people loving what your product does for them.

Summary emails are a fantastic way to convey the value you’re providing.

Stay top-of-mind with retargeting

I’ve written before about how we use retargeting for converting new customers, but we actually also use it to keep customers.

Many people who do ad retargeting filter out users who are already customers, but we actually show ads to our current customers for the sole purpose of keeping Baremetrics top-of-mind.

Your product is likely one of dozens of services they use on a regular basis and it can be easy to get lost in the mix. Using ad retargeting you’re able to gently remind them (especially early on) that they’re getting value from you.

What are you doing to reduce churn?

So, what are you doing in your product to reduce churn? Have you tried and had success with any of these methods?

Would love to hear what has/hasn’t worked for you!

Josh Pigford

Josh is most famous as the founder of Baremetrics. However, long before Baremetrics and until today, Josh has been a maker, builder, and entrepreneur. His career set off in 2003 building a pair of link directories, ReallyDumbStuff and ReallyFunArcade. Before he sold those for profits, he had already started his next set of projects. As a design major, he began consulting on web design projects. That company eventually morphed into Sabotage Media, which has been the shell company for many of his projects since. Some of his biggest projects before Baremetrics were TrackThePack, Deck Foundry, PopSurvey, and Temper. The pain points he experienced as PopSurvey and Temper took off were the reason he created Baremetrics. Currently, he's dedicated to Maybe, the OS for your personal finances.