Five Effective Churn-Saving Techniques

Churn is something any SaaS company will always keep fighting with.

Put simply, churn stands for losing existing paying customers.

Types of Churn

The two main types of churn are:

• Revenue churn (you are losing money)
• Customer churn (you are losing customers)

Obviously, these two are inter-connected for most of the SaaS businesses out there.

Additionally, there are:

• Voluntary churn: This is when your customers choose to leave your site or quit using your platform.
• Involuntary churn (also known as delinquent churn): When your customers’ accounts are terminated by mistake or by accident.

Reasons for Churn

Voluntary churn happens for many reasons, many of which may not be necessarily connected to your business, like your customers’ budget limitations or changes in decision-making units. But there are many reasons for voluntary churn that can be controlled and fixed by you, including:

• Product issues
• Poor customer support
• Weak onboarding process
• Poor pricing strategy (especially when your pricing loses in comparison with your competitors)
• Bad user experience
• Poor product positioning strategy, etc.

In many cases, it is the combination of reasons that results in increased churn. It is important to identify those underlying issues and work on fixing them.

Further reading: Top 5 Reasons for Customer Churn + Fixes for Each

There are several reasons why involuntary churn may happen, for example:

• Payment method failure or expiration
• Technical reasons (due to downtimes or errors that happen at the moment when recurring payments are charged)
• Fraud prevention false positives
• Payment method limitations (for example, when your customer’s country is no longer supported by your payment processor)
• Trial expiration (with no clear action provided for keeping an account), etc.

Further reading: Combating Voluntary vs Involuntary Churn 

Here are the 5 most effective churn-saving techniques:

1. Ask for Feedback from Your Customers

This may sound self-explanatory but too many businesses fail to actually listen to their customers. And yet, there’s no other way to clearly understand why they may be leaving.

There are several ways to ask for your customers’ feedback without distracting them from following those sales funnels. These methods include:

• Surveying your customers: PayKickstart offers a handy “Customer Surveys” feature, so you won’t need any other software for this. PayKickstart’s surveys can be times to a certain action (e.g. when a user chooses to request a refund), so you can generate insights that really matter.
• Email automation: These days email marketing platforms allow you to create complicated workflows sending custom emails after a certain action or combination of actions. For example, you can email your customer when they browse around your platform without taking any action. This may be an indicator of that user being lost or confused.

Additionally, PayKickstart offers the “Cancellation Saver” that will prompt your user to choose the reason for canceling right when they are about to quit:

2. Keep Your Customer Informed 

Make sure your customers know that there is a problem with their accounts, and give them time to correct mistakes before canceling their accounts. Automate email notifications alerting your customers:

• Before their card on file is about to expire for them to have time to update the card
• Immediately after their payment fails due to failure or card expiration.

PayKickstart has both of these email notifications handled for you:

Additionally, PayKickstart offers multiple email marketing integrations,  subscription management tools, and many more:

• Manage upcoming billing reminders;
• Send trial expiration reminders;
• Email customers about payment failures, etc.

It is a good idea to set your email alerts on an alternative domain to keep yours safer.

3. Improve Your Customer Support

Ensuring top-notch customer support is key to reducing churn. First of all, your customer support representatives are able to save any account if help is provided promptly and effectively. When customers have issues or questions, they want to feel heard and understood. Good customer support can provide that empathy, and also help to solve problems quickly and efficiently.

By focusing on customer needs and building strong relationships, your support team can help improve customer retention and drive long-term success for your business.

Secondly, your reps talk to your customers on a daily basis. If you need to know what dissatisfies your customers, ask your support team!

Building a detailed knowledge base will help your customer service be more efficient in two ways:

• By letting your customers find answers on their own (and thus lowering the customer service workload)
• By giving your customer support reps reliable information to help them answer questions quicker.

Text Optimizer helps you put together a knowledge base by allowing you to auto-generate answers to questions. Make sure you edit those answers by adding specific details related to your business and product:

4. In-App Notifications

In-app notifications are messages that pop up within your application for your logged-in users. These notifications can be used as additional incentives for your users to keep their accounts.

With PayKickStart you can set up various kinds of transactional in-app notifications, including:

• Your trial is expiring
• Your account needs an authentication
• Your card is expiring
• Your payment failed

For example, if your paying customer logs in to their dashboard, they will see an in-app notification about their failed payment. This way, even if they missed your email (for example, if it was sent to the spam folder, they will know there is a problem when using your product.

Here’s an example from PayKickstart:

5. Automate Invoicing

A lot of accounts may be lost if your team is invoicing manually. Emails get lost, and payments take longer as they rely on your accounting team to be always present to process invoices.

Manual SaaS invoicing will hurt your cash flow and increase churn, so make sure you automate it with PayKickstart.

Conclusion

It is important to manage churn because it comes with important risks:

• Lower ROI: Losing customers means losing revenue. By retaining more paying users, your business will maintain a steady stream of income, which is key to growth and profitability.
• Higher customer acquisition costs: Onboarding new customers is expensive. When existing users leave at a fast rate, your business is forced to invest more money in attracting new customers to replace the lost ones.
• Lower customer lifetime value: When customers stay with your company for a longer period of time, they spend more money with you, without you investing any resources in building that revenue.

Reducing churn is key to maintaining a healthy business and ensuring long-term success. Good luck!

Ann Smarty

Ann Smarty is the Brand Manager at Internet Marketing Ninjas, as well as co-founder of Viral Content Bee. Ann has been into Internet Marketing for over a decade, she is the former Editor-in-Chief of Search Engine Journal and contributor to prominent search and social blogs including Small Biz Trends and Mashable. Ann is also the frequent speaker at Pubcon and the host of a weekly Twitter chat #vcbuzz

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