Churn is a pain in the SaaS (see what I did there?). Sometimes you just want to get rid of the “cancel account” button so no customer can ever leave you again. Churn might be a scary metric, but it doesn’t have to be. Armed with the knowledge of entrepreneurs that have already fought the battle against churn and won, I believe that you too can put churn in its place. That’s why we’ve assembled a list of the top 5 articles on improving customer loyalty, and therefore reducing churn.
Note: if you’re not entirely familiar with what churn is, I’ve written a short article, “The Simple Way to Define, Understand, and Calculate Customer and Revenue Churn in SaaS” that gives you a good understanding of churn.
There is No Golden Solution
Keep in mind that what works for one company might not work exactly the same for yours, but that’s okay. Just because there’s no “industry secret” that instantly reduces your churn to 0% and works for every SaaS company, doesn’t mean that you can’t create your own highly-effective method for reducing churn in your company.
Each of these articles are incredibly powerful by themselves, and you can pick and choose which ones to read, but we highly encourage you to read all of them, as they collectively cover most all areas of churn, and you can always mix and match ideas to come up with your own winning strategy.
Starting off with a quick, lighthearted post by the metric masters themselves, this post is a simple summary of churn, and they also share some quick tips on how they reduced their churn and increased customer loyalty by simply sending one email a week to their users.
“Churn. The archenemy of any SaaS company. No metric causes more sleepless nights and receding hairlines. It’s the slow leak that regardless of how handy you are, you’ll never completely plug. It’s the bane of our business existence and we want it gone! Now! Ahhhhhhhh!”
by Shayla Price
This article focuses on the beginning of your customer’s interaction with your company and product: onboarding. If a customer has a negative experience with your product at first contact, you’re going to be fighting an uphill battle from there. Shayla talks of the importance of a great onboarding process; one that easily shows the customer how much value they will be getting from the product right away.
“Successful onboarding doesn’t revolve around your company’s goals, instead it focuses on meeting (or exceeding) the user’s expectations.”
by Alex Turnbull (CEO, Groove)
Groove, a customer support app for startups and small businesses, is notorious for many incredibly insightful and helpful articles about business. They have tons of insightful posts about what they’ve learned while building their company to a multiple 7-figure business, and this article is no exception. Stuck at a 4.5% churn rate, which was stunting their growth, the Groove team started an initiative to lower their churn rate, and ultimately reduce it to 1.6% using what they call “Red Flag Metrics.” Alex, the CEO of Groove, explains exactly what they did to achieve their amazing results, and offers many suggestions about how to apply what they learned to your business.
“When a user got stuck on a task – for example, creating a rule – they wouldn’t always tell us. In some cases, that session would be their last.
So we began to reach out to users who we thought might be stuck on a particular task. When a user spent far longer than average on a particular page in more than one session, we reached out and asked if they needed help.”
by Zach Bulygo (Blogger @ Kissmetrics)
This is a great article for many reasons, but I love it because of how much it talks about weakness. That’s right, weakness. Many companies like to think that they doing everything well, but that’s almost never the case. Things get overlooked, budgets are tight, and some things just slip through and aren’t as good as they could be. Zach goes very in-depth on finding your company and product’s weaknesses, and cites many examples from companies that most of us know (or knew).
“Where would Rackspace or Zappos be if they didn’t deliver stellar customer service? Where would Apple be if their products weren’t beautifully intuitive? Would Amazon be worth over $100 billion if they didn’t have a huge selection of products at competitive prices?
All these companies deliver on their competitive advantage consistently. Customers have come to expect it.”
by Shane Barker
Churn affects long-term growth more than people think. Shane, a digital marketing consultant for fortune 500 companies, not only does a great job of showing just how important churn is in a SaaS company, but he also shares amazing strategies to reduce churn rate, using tons of case studies and real examples from other companies.
“Churn rate is easily one of the most essential metrics when measuring the performance of SaaS businesses. Totango reports that the fastest-growing companies will reduce churn rate less than 5%. For SaaS companies, a lot of time and money is spent on acquiring customers. Since this investment pays off over time, the goal is to have customers stick around for as long as possible. The longer your customers stay, you’ll reduce churn rate and make your business stronger.”
Now Take Action
These articles are amazing, and we have no doubt that you’ll finish reading them with tons of new ideas about how you’re going to reduce churn in your own company. This is great and all, but you must make sure to actually implement some of the ideas and strategies that you have. Increasing customer loyalty isn’t a simple thing. Some of the strategies that you try simply won’t work. Like most things, it’s a process of trial and error. It may take a while, but the end result can be incredibly valuable to both you, and your customers.