Every conversation about how to reduce churn in Saas should start with the reminder that it’s much, much cheaper to retain existing customers than it is to acquire new ones. Additionally, long-time customers buy more and refer more connections. It’s no surprise then that one of the most expensive mistakes your organization can make is customer churn left unchecked.
Sadly, high customer churn has long been the scourge of many SaaS companies. The reasons why customers cancel their software subscriptions are varied and can require a little bit of detective work to uncover and address.
Voluntary churn vs. involuntary churn
Before we jump into how to reduce churn with your SaaS partner program, it’s worth differentiating between two different types of customer churn. Voluntary churn refers to customers who cancel their subscriptions on purpose. Involuntary (or passive) churn refers to customers whose subscriptions are canceled due to a payment failure. Involuntary churn is usually the result of expired or canceled credit cards, and there are a range of proactive practices that can help you get on top of this. For the purposes of this article, however, we’re only going to be talking about voluntary churn.
Siloed products are more vulnerable to churn.
Customers buy a product to solve a particular business problem. When it doesn’t solve the problem, they end up canceling. On the face of it, it might sound like there’s not much you can do to stop this from happening, but actually, there is. The key is taking your product out of its silo and seeing it instead as one vital cog in an agile and innovative machine.
Fostering a solution selling mindset rather than a traditional product-led sales mindset is becoming vital to SaaS success today. What this means is that you need to combat churn by upskilling your team to focus on finding new ways to solve customers’ actual business problems, rather than simply trying to sell your existing products to them. When your product plays a vital role in solving a customer’s problem, they’re not going to cancel.
McKinsey reports that 85% of sales leaders predict that solution selling will become a core B2B sales capability going forward. Companies that adopt a value-creation mindset consult with customers to create tailored value propositions and bespoke solutions that yield high results.
Your SaaS partner program is a powerhouse resource when it comes to executing a value creation mindset.
By collaborating and co-innovating with your network of partners, you’re able to create tailored, holistic, end-to-end solutions that result in highly integrated workflows and big results for your customers. This could take the form of co-creating joint products, pre-packaging your tech alongside supporting partner apps and services, or building intuitive integrations.
Patrick Campbell agrees that building integrations with your partners’ tech can help reduce customer churn: “Integrations help you embed your product in a SaaS ecosystem, which ultimately strengthens customer retention and benefits your company by increasing productivity, increasing depth and breadth of usage, and improving distribution and visibility.”
Customers churn when they don’t see the results they expected soon enough.
Sometimes, your product is the right fit for your customer, yet they still end up canceling their subscription within 90 days of signing up. Why? The answer is almost always a pretty simple one: the customer didn’t see results soon enough. If the time period between signup and your customer’s ‘first success’ is too long, you’re liable to lose them.
Help customers get results quickly by providing a smooth onboarding experience, ample product training, outstanding customer support, and access to supporting partner apps and services.
“Businesses need to educate their customers with proper onboarding meetings as well as educational materials,” says John Solomon of Chargebee. “These materials can be in the form of guides, newsletters, blog posts and video tutorials.” Video tutorials are particularly useful when it comes to helping new customers understand how to use your product to its fullest potential. In fact, Wyzowl reports that 96% of people say they’ve watched an explainer video to better understand a product or service.
Customer training and onboarding alone aren’t enough, however. Your customer support also needs to be outstanding if you hope to retain customer loyalty. PWC reports that 59% of customers say they’ll stop using a brand or product they love after just a couple bad experiences. Cover all of your customer support bases by using both automated and human customer service solutions. Step-by-step explainers, FAQ pages, troubleshooting guides, and chat bots should feature alongside knowledgeable, well-trained staff ready to personally walk customers through issues over the phone.
Incentives and upgrades can further help fend off churn. Offering incentives as part of a loyalty program has been shown to increase customer LTV, considering Wirecard found that 75% of customers say they’re likely to make a repeat purchase after receiving an incentive via a loyalty program. Surprise discounts and upgrades that aren’t part of a loyalty program can likewise improve customer outlook. “If your customer is not having a great experience with your product, a surprise discount may incentivize them to continue trying to make it work,” advises Solomon.
Connecting customers with partner apps and services increases customer success.
Tech companies and service providers who are part of your SaaS partner program are well placed to help your customers understand the full functionality of your product and assist them in achieving the results they need early on. Increase customer success by connecting your customers with partner solutions and services that enable them to get the most out of your product.
This doesn’t have to involve manual matchmaking or endless introductions. Transforming your partner directory into a commerce-enabled marketplace allows your customers to conveniently and securely browse, find, and purchase services, apps and integrations from your accredited partners without any handholding. If you do want to connect a customer with a particular partner or product, however, simply provide the link to a listing containing all the specs, details, and pricing, or actively collaborate with customers and partners through secure Customer and Partner Portals. how to reduce churn in saas
