7 REASONS SAAS COMPANIES DON'T RETAIN CUSTOMERS

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Picture of Kimberlie Williams
Written by Kimberlie Williams

 

Churn is the rate at which your customers are ending their recurring subscriptions to your software. Lowering churn is essential to not only running a successful SaaS company, but growing it as well. 

Churn is often dismissed as something inevitable, but the cost of acquiring a new customer is far more substantial than retaining one, so keeping customers active and engaged should be a priority for any business.

If your company is more equipped to see the what causes customers to eye the door, that’s more opportunities to help them change their mind before you lose them for good. 

1. Poor Customer Onboarding

The reason they picked your software is because they have an end goal in mind. Your job is to do your best to help them reach that goal for their business.

They may want to improve efficiency, increase ROI, or just have their data load in a shorter time frame.  Customer goals like these won’t end and will be ongoing for the time they spend with you.  

In order for people to stay committed to your software, you have to stay committed to training and supervising them, so that they can successfully improve their business. 

If their goal is not realistic for their means, explain why and show them the next best option. 

2. Poor Customer Support

Even if your software is the best in the business, you could be driving your customers away by making it a struggle for them to ask simple questions.

Don’t forget that you are providing a service, and if people aren’t satisfied with it, they’ll start looking elsewhere.

Always have an ear open to your customers and to any changes in the industry, so that you can take a proactive approach to being helpful and making improvements to both your business approach and software.

3. Your Software isn't What Customers Expected

If you’re experiencing a lot of feedback from your customers that your software isn’t what they need, this means that your marketing wasn’t clear.

Make sure that your software’s key features and what makes it unique to your competitors are at the forefront of your brand positioning.

The goal is not to just make a quick sale, but a sale that will stay with the company and help offset the expenses of acquiring customers.

4. Pricing

Customers will welcome higher pricing for more personalized, custom software packages that delivers tailored solutions for them, but there's only so long you can keep that going before customers will reach their limit.

Even more dangerous is high pricing for standardized software your customers could easily replace with another, lower-priced company. That will have them ready to churn in a heartbeat.

Observe the pricing for competitive companies in a similar state of success as your own when pricing. Don't sell your software too short either.

5. Your Competitors are Luring Your Customers Away

The best way to keep rival software companies from luring away your pool of customers is presenting software with the highest quality features essential to running their business.

Quality can mean different things to different people, such as pure innovation, efficiency or reliability, it's all in what your customers value. It doesn't have to be the best period, but in your region is a good start.

If your software company is not ready to do this, identify what your company does better than the competition. If your software company is more personable and patient, present that as one of your strengths to differentiate your company.

That way you are attracting more customers who require that, making them less likely to be lured away by the competition.

6. Not Enough Personalization

Customers will be loyal to the software that provides them the best fit and scalability options in the future. Think about what value the key features of your software offer.

If you’re selling to other businesses, do the key features of your software help them them achieve business goals and meet their individual challenges in a way that your competitors do not?

If your customers answer these questions no, they’re more likely to churn.

7. You Aren't Observing How They Interact With Your Company

Implementing CRM (Customer Relationship Management) and marketing automation software for your company will allow you to keep track of signs of churn, such as customer inactivity, customers visiting the cancellation page, and even notifications that changeups are occurring at your customers’ companies.

Knowing how and why churning is possible for these customers allows your company to be proactive with their approach to fight churn before the churn is finalized.