Customer Churn As A SaaS Metric

Customer Churn As A SaaS Metric

Customer churn is one of the significant challenges faced by SaaS companies. Any company expects to be able to retain their customers and have them renew their subscriptions regularly.

However, it is not strange to have customers discontinue their subscriptions, but it becomes a serious concern when it reaches an alarming level. Meanwhile, the success of a SaaS company is measured by its ability to minimize customer churn

What Is Customer Churn?

Churn is the number is subscribers who have stopped their subscriptions to a service in a particular period. Customer churn is a serious problem for any subscription company, and it is crucial to expanding the customer base to compensate for the customers that discontinue their subscriptions.

While efforts should be made to prevent customer churn, a company should also endeavor to expand and retain customers by setting up strategies to improve customers’ experience and satisfaction. The reasons underlying customers’ decision to discontinue their subscriptions must be known in order to prevent further churn.

Customer churn can be avoidable and unavailable and classified according to the timeframe it happens such as short-term churn, mid-term churn, and long-term churn. However, the onus is on companies to address the factors responsible for churn.

Causes of Customer Churn

Customers discontinue their subscriptions for several reasons making it mandatory for the customer success team to work seriously and prevent churn having known what the reasons are. Meanwhile, here are some of the causes of customer churn.

1. Failure With User Adoption

When a company fails to get subscribers to adopt its products, customers do not understand several many things relating to the product. Such customers would sooner or later unsubscribe.

2. Poor Onboarding or No Onboarding Experience

Most excited new customers feel abandoned in the middle of the way without proper guidance or no guidance at all to familiarize customers with the customers.

3. No Support

Customer support is an indispensable factor that promotes the interest of customers in a product especially when they need to have questions about the product answered. When there is no support to follow up on customers and their complaints, there is likely going to be customer churn.

4. Wrong Customers

When a company failed to get the right set of people, such customers will eventually discontinue their subscriptions or service with the company.

5. Failure To Engage Customers

When a company’s product is not an essential part of the customers’ lives and the company is not proactive to engage them, they will feel disengaged and churn.

6. Competitors’ Factor

Competitors could offer products that are better than your products. This could make customers abandon the company’s products and go for competitors’ products.

7. Disappointment With The Products

Customers churn when their expectations about the product they purchased are not met.

How to Prevent or Reduce Customer Churn

It is essential that a company works hard to prevent or lower the rate of customer churn. Here are some of the ways to reduce churn retain customers.

1. Engage Customers

Get your customers to interact with your products with engaging content. There will be a significant reduction in the number of customer churn experienced.

2. Charge Customers Up Front

When customers are charged up front, they are less likely to churn unlike when they are offered free trials. Even if you would provide a discount, charge for your products up front.

3. Find The Cause and Address It

Identify the reasons for regular churn and find ways to address it. Your efforts at this point will put an end to that particular activity churn.

Disclosure:

I received the items in this post as complementary to share my honest and unbiased opinion of products (unless otherwise stated). All opinions expressed on this page are those solely of Laurali’s Blog & Reviews. Thank you for your interest!