Customer churn, or client attrition, refers to the loss of clients. This can occur at virtually any point in the client lifecycle, from the initial client acquisition to the renewal period. In the context of software-as-a-service (SaaS), customer churn refers to the number of customers who cancel or do not renew their subscription to SaaS products.
Customer churn can be a significant issue for SaaS companies because the recurring revenue model depends on retaining customers over time. High churn rates can lead to decreased revenue and profitability, as well as a decrease in the overall size of the customer base.
But what causes customer churn for SaaS companies? And what are some proactive ways to reduce churn and build a strong customer base? Lastly, where can you access automated onboarding solutions to increase customer retention and satisfaction in a scalable way?
In today’s post, we will answer all of these questions and more, so let’s get started!
Client churn can come in many forms, including:
While the different churn categories listed above can help you identify customer churn, they don’t necessarily help you get to the root cause of the problem. The truth is that many factors can contribute to customer churn in the SaaS industry. Here are just a few of the most common issues:
As you can see, many different factors can contribute to customer churn, but the primary cause of failed relationships begins during the onboarding process. By understanding the hangups in onboarding that lead to customer churn, SaaS companies can take steps to minimize the churn rate and retain their customers over time.
Preventing customer churn in the SaaS industry requires a multi-faceted approach. Let’s take a closer look at some of the best ways to improve your onboarding and implementation processes to stop client churn before it starts:
You can’t understand what matters to a potential client unless you know who holds a stake in the business. Are you onboarding a small startup with one or two founders or a large corporation? Either way, ensure you identify the stakeholders and, ideally, contact each of them during the onboarding process.
When you know the size and scope of a project, you know how much time and resources you need to allocate to it. If you fail to grasp a project's scope, you could over-invest, causing you to fall behind with other clients. Alternatively, if you under-invest in a large-scale project, you could lose your customer early because you simply can’t keep up.
During the first stages of onboarding, listening is your #1 job. If you don’t fully understand your client's wants and needs, you will almost certainly experience high churn. So, always listen to your client’s needs and do everything you can to exceed their expectations.
You always want to have a good working relationship with clients, regardless of how long you’ve been working together. That said, establishing positive working dynamics during the initial onboarding process is particularly crucial. Failing to do so early on could sour the relationship before it has time to flourish.
Many SaaS companies fail to consider the major changes a business must undergo when implementing new software. Entire management processes may be upended, which can cause a lot of grind and confusion in the early stages. Always be empathetic and work to help the client overcome any rollout issues.
Rollouts don’t just require troubleshooting. In all likelihood, you will need to train members of your client’s team so that they can use your products or services to their full potential. So, don’t be afraid to allocate additional resources to training.
Implement a customer feedback loop by encouraging customers to provide regular feedback on their experience with your software. Then, try to act on their suggestions in a timely fashion. This will show customers that you are actually working to provide them with a great experience.
Even if you’ve covered all of your bases, you shouldn’t just phone things in when the onboarding process is closing. Instead, review the final deliverables to ensure they align with the customer’s needs. If they don’t, talk with the client to make the necessary adjustments.
After the product rollout, make sure to stay connected with your client to ensure high adoption. If you onboard a client who fails to use the product, they will likely fail to renew when the time comes. This is a common form of customer churn that is frequently overlooked.
Use analytics to monitor how customers use your software and identify potential issues that may lead to churn. Continuously tracking engagement data is one of the best ways to keep customers for the long term. If you notice sudden drops in usage, you can quickly reach out to troubleshoot the issue.
Smart onboarding begins with automation, as it allows you to scale your business without sacrificing customer satisfaction. Automated customer onboarding also helps you save on the time and resources required to bring on new clients. When you use a quality automated onboarding platform like Setuply, you can expect:
With Setuply, you can automate your onboarding process so your team can focus on what they do best. For the best automation solutions that allow you to deliver an unparalleled onboarding experience, reach out to the team at Setuply today!