Turning SaaS Churn Into A Growth Strategy: Changing Our Perspective
Churn is the boogey man of SaaS businesses. It’s the thing we fear most, the metric that keeps us up at night. And, yeah, it’s true- an out of control churn rate can absolutely hamstring your business. But what if we changed our mindset about SaaS churn? What if we looked at it as an opportunity for growth and improvement?
So how do you turn something that’s the literal opposite of growth into a growth strategy? The trick is to realize that churn prevention isn’t just damage control- it’s an opportunity to come at your business with a totally new approach. Your churn shows you where you’re falling short and gives you a roadmap for improvement.
When and why your users churn tells you everything you need to know to shore up your SaaS business for long-term, stable growth. A mindset change is only the beginning- let’s talk about concrete steps you can take to turn your SaaS churn into a growth strategy.
Get to know your users and why they churn.
You can’t properly respond to your churn if you don’t know what causes it, and you can’t understand the root sources of your churn if you don’t understand your users. Simple? Well, kind of.
A bullet-proof retention strategy starts with relationships and proactive communication. Engage with users consistently, and put together exit surveys that give you a good sense of why users churn when they do. Use cohort tables to see where in the customer journey you have your highest rates of SaaS churn. I just recently wrote a piece about using customer digests to reduce customer churn, and these digests can also be a great tool to see what aspects of your tool customers are and aren’t using when they churn.
Ask yourself: is there a certain level of activity that customers dip below in the months before leaving your service? Is there a feature that churning customers generally don’t understand? Understanding these different factors lets you be proactive, and take steps to offer a solution before a concrete problem drives users away.
Lock down your marketing.
Chances are, your feature set closely matches the needs of a very specific set of users. Speak to them first. One of the biggest drags on a SaaS business is users that are poorly-suited to the service long before they start, but are brought in by sharp marketing and try to bend the tool to fit their needs. And this can lead to large amounts of SaaS churn.
These customers will become a consistent drain on your customer service team, will constantly have feature requests that don’t fit with your long-term product roadmap, and will quickly churn out when they realize that another tool better suits their needs.
Instead, lean into your niche. Reach out to customers who love you, who consistently leave glowing reviews, and figure out what makes them so perfectly suited to your product- or, more accurately, what makes you so perfect for them. Testimonials from these users are a great resource, and can suggest to potential customers how your feature set best impacts specific kinds of businesses and individuals.
Zoom in on your product roadmap.
At the same time as you sharpen your marketing, dive deep into your product roadmap. Are your planned feature releases and bug fixes aimed at your ideal customers?
The danger for a SaaS business is spreading yourself too thin. It’s trying to be everything to everyone, and the fact of the matter is that you can’t be.
Make sure your CS team is connecting with development regularly and passing along the feedback that they get from existing users. Your entire team should know who the superstar users are and understand their needs.
Creating a public product roadmap is a great way to ensure you're building the product your customers truly want and need. It's not for every business, but if it works for your customers, it's a great way to gauge interest in certain feature updates and product enhancements. Loom does a great job of managing a public roadmap:
When the different parts of your operation are siloed, decisions end up being made in the dark when they really, really don’t have to be. Part of moving your SaaS churn strategy from reactive to proactive is building better lines of communication, and you’ll be amazed at how this shift can improve your overall business.
Map out the user journey and the ways you’re engaging them along the way.
Okay, we’ve talked about the user journey before. A lot. We even made a killer infographic to help you follow the process from beginning to end, because when push comes to shove, it’s a vital step to understanding and responding to your SaaS churn. The beauty of understanding the customer journey is that it helps you step outside of your role as a business owner and into their shoes as a user. It also lets you map your engagement strategy onto concrete moves that your customers are making.
Think of this step in three parts: mapping out the user journey, mapping out your engagement, and then looking at the specific content of your engagement strategies in context.
It might sound like a lot, but each step in the process informs the next. At the end, you’ll be able to see visually the places you’re engaging your users and the places you’re falling short. You’ll also have a chance to see the content you’re using in the order and the context that your users do.
Go through the copy with a fine-tooth comb; first, with an eye for grammar and syntax, but then thinking more about branding and style. Remember: every interaction is an opportunity to prove the value you are providing to your users. Craft your engagement on those terms.
Fill in the gaps in your engagement strategy.
Is there a point in the user journey where your engagement strategy drops off? Do your users experience radio silence when they finish onboarding? No one likes to be alone for too long.
Likewise, just because a user hasn’t made a CS complaint recently, that doesn’t mean they are satisfied. Finding places to proactively reach out means that you can beat them to the punch, help them articulate their needs, and grow their understanding of your service for a long-term connection.
Good news: you can upcycle a lot of this content. The same messaging that engages your existing users can also be repurposed for marketing. Because you are creating for your existing customer base, this messaging can be a great way to target your ideal customer. There are even opportunities to expand and improve your onboarding with this new messaging, digging into your feature set more broadly and anticipating issues before they happen.
Automate SaaS churn prevention (where you can).
Dealing with SaaS churn can be exhausting and can put a lot of strain on your resources, especially if you’re running a smaller business. Luckily you can automate large chunks of your retention plan.
Automated exit surveys are a key way to understand your churn and should be top priority if you aren’t already running them. Automating your onboarding emails is a great next step. Monthly digests are another process that, once automated, can save you a ton of time and vastly improve your retention efforts. Finally- automate your passive churn retention. You’ll be amazed at how much revenue can slip through the cracks, and how much of it is recoverable.
So what features do you need to recover the maximum amount of revenue? Look for custom retry schedules, easy card updates, and advanced analytics to let you know exactly how your campaigns are going.
But really- get to know your users.
And with that, we’ve come full circle. Investing in your users is a continuous process, and there’s always more room to explore and improve. One of the most exciting aspects of this process is the ability to turn satisfied customers into passionate ambassadors for your brand.
Testimonials are a great starting point- check out our tips and tricks for asking customers for testimonials here.
Continually improve your exit surveys and hone the questions you ask. Users that churn are often sending a message and it’s vital to your business that you hear it.
Find new ways to partner with your superstar users and encourage outreach from them. Value and act upon the feedback you get from them. Users that feel heard are much more likely to stay on long-term.
Most important: remember that churn is a natural part of running a SaaS business. Don’t fear it. Learn from it. Use the valuable insights that you gain from your churn to improve your business and build meaningful connections over time.
The answer to success in a SaaS business isn’t always more users. It’s doing more with what you’ve already got.