How to Reduce Customer Churn for Your SaaS

While it’s not a positive measure, customer churn is a vital metric to track for a growing SaaS business. Customer churn rate is the percentage of customers that opted out of your company’s product or service at a specific time frame. The higher the churn rate, the more money is walking out the door. So here are ways to reduce your churn rate and give your SaaS business a better shot at growth.

1. Onboard your Customers Well

Customers that encounter your software for the first time and take on the free trial don’t count to your churn rate, but getting them hooked can make a huge dent on your customer churn rate later on. For them to turn over and become paying subscribers and stay that way, you need to implement a proper customer onboarding system. The onboarding system should help first-time users immediately realize how the software can be of use and benefit to them. By showing them a real boon to users from the beginning, you help them understand better how the software can benefit them as time passes. Onboarding prospective users will make them more likely to sign up and stay on.

2. Be on the Lookout for Kinks

As you work to grow and improve your software, flaws in the system will likely show up as you go along. You can trace flaws in your software by tracking and analyzing the differences in behavior between users that leave and users that remain.

A useful metric to track is behavior patterns among users’ logins and user activity. If you notice infrequent logins, that’s a visible sign they’re not using your software. Should they take longer to accomplish a task with the software, they likely find it difficult to use. And if users’ logins and visits are shorter than the average time to use the software, that means they’re not making full use of it. By tracking these patterns, you can determine in advance which users are more likely to churn, so you can specifically target them with follow-up contact and remind them of the benefits. This is also an excellent opportunity to get feedback, take a step back, and see the flaws, then work to correct the kinks that users pointed out.

3. Engage Users More

Users that regularly log in and use your software regularly are, of course, less likely to churn. A good way to retain them is to offer them a way to get value daily or weekly, such as a regular report or checklist of actions to receive a certain benefit. Active users that you engage regularly are likely to rely on your SaaS and more amenable to renewing their subscriptions.

First-time users should likewise be afforded some engagement since your engagement can be the deciding factor for signing up or moving on to find another service.

Using a laptop4. Continue to Provide Value

Another effective way to reduce your churn rate and keep users coming back is to continually improve the experience of using your service. This can be done by working to improve the functionality of the software, offering rewards, and adding value that puts you ahead of rival services. You can also give value by educating users with blog posts and case studies showing how the service has benefited other users.

5. Continue to Market to Them

The sale of your software doesn’t end after users have subscribed and have been properly onboarded. You should keep reminding them of the value, benefits, and reasons they signed up for the service. The chances of users churning at the next renewal date can be greatly reduced by continually “selling” the service to them.

The churn rate of your software is a double-edged sword; while it’s a painful reminder that you are losing subscribers, it’s also a valuable metric that gives priceless insights on what must be improved. Follow the measures to reduce your churn rate, as these can help your business survive and thrive.

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“Right now, computers make our lives easier. They do work for us in fractions of a second that would take us hours. […] As things progress, they’ll be doing more and more for us.”
Steve Jobs
co-founder of Apple Inc. and founder of NeXT
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