5 Tips to Reduce Churn Rates in SaaS Companies
Posted: Thu Dec 12, 2024 10:51 am
The churn rate is one of the essential indicators for measuring the performance of a SaaS ( Software as a Service ) company . It is a metric that indicates the percentage of customers who have unsubscribed from a service over a certain period of time, so it will provide us with very revealing data on how the service is working. To calculate it, we must divide the number of subscribers we have lost in the period of time we are interested in measuring by the total number of subscribers we had at the beginning of that period (for example, a month).
In a SaaS company, the churn rate is usually between 5 and 7 percent , so if it is between or below these parameters, we should not be too alarmed. Let's not fool ourselves: we must be realistic and be cambodia phone number library that a churn rate of zero is practically impossible to achieve. In any case, we must always strive to reduce this churn rate , for which I advise you to apply the following recommendations:
1.- Do not generate false expectations
Don't try to sell your clients a service that you can't offer them. This is a more common mistake than it seems and it ends up undermining users' trust in your services and your brand. If you disappoint the client with a service that is not the one they intended to hire, they will quickly cancel the contract and will probably never trust you again.
2.- Follow up with your clients
Try to keep in constant contact with your customers from the moment they activate their subscription through periodic questionnaires. This way, you will better understand how they use your software, what benefits it brings them and, above all, what aspects you need to improve . It is especially important to take into account dissatisfied users , as they are the ones who will give us the most clues about the failures in our service. In this sense, it is also important to have a good customer service .
3.- Don't stay stagnant: evolve
Even if you manage to launch a good service and customers are pouring in every day, you have to keep looking for ways to improve every day. Successful companies constantly launch new updates to their products and let their customers know so they can take advantage of them in their businesses. If you remain stagnant, your service will soon become obsolete and customers will prefer to try what the competition offers.
4.- Make payment easier for your customers
Try to find ways for your customers to pay for their subscription as easily as possible . If you make things easier for them, it will be more difficult for them to abandon your service because they don't know how to pay or because they don't want to waste time on a tedious and boring process. The less you make them think about whether they should renew their subscription, the better. A good way to reduce the abandonment rate when renewing a subscription is to promote long-term plans , offering discounts to your customers for signing up for a longer-term service.
In a SaaS company, the churn rate is usually between 5 and 7 percent , so if it is between or below these parameters, we should not be too alarmed. Let's not fool ourselves: we must be realistic and be cambodia phone number library that a churn rate of zero is practically impossible to achieve. In any case, we must always strive to reduce this churn rate , for which I advise you to apply the following recommendations:
1.- Do not generate false expectations
Don't try to sell your clients a service that you can't offer them. This is a more common mistake than it seems and it ends up undermining users' trust in your services and your brand. If you disappoint the client with a service that is not the one they intended to hire, they will quickly cancel the contract and will probably never trust you again.
2.- Follow up with your clients
Try to keep in constant contact with your customers from the moment they activate their subscription through periodic questionnaires. This way, you will better understand how they use your software, what benefits it brings them and, above all, what aspects you need to improve . It is especially important to take into account dissatisfied users , as they are the ones who will give us the most clues about the failures in our service. In this sense, it is also important to have a good customer service .
3.- Don't stay stagnant: evolve
Even if you manage to launch a good service and customers are pouring in every day, you have to keep looking for ways to improve every day. Successful companies constantly launch new updates to their products and let their customers know so they can take advantage of them in their businesses. If you remain stagnant, your service will soon become obsolete and customers will prefer to try what the competition offers.
4.- Make payment easier for your customers
Try to find ways for your customers to pay for their subscription as easily as possible . If you make things easier for them, it will be more difficult for them to abandon your service because they don't know how to pay or because they don't want to waste time on a tedious and boring process. The less you make them think about whether they should renew their subscription, the better. A good way to reduce the abandonment rate when renewing a subscription is to promote long-term plans , offering discounts to your customers for signing up for a longer-term service.