The lifeblood of your SaaS company is your customers. They pay subscription fees which help keep your organization running and earn you a living. Losing a customer can be very painful and it is important that you understand the reasons of why they have unsubscribed or churned from your services. Then you can implement processes to prevent it in the future as well as monitor other SaaS metrics that will help you get to know ahead of time that customer is going to churn.
When businesses look at the reasons for unsubscribing, there are often trends. Here are the main reasons why your customers might be leaving your SaaS business and what you can do to stop others leaving for the same reasons.
1. Poor customer service
Customers love to feel special. When something goes wrong with a product, and it isn’t sorted to the customer’s satisfaction, they are more likely to leave your business. In fact, customer service is one of the primary reasons for customer churn whereas price is rather unimportant.
This can have a double negative impact as those leaving your business due to a bad experience will tell others and this could limit your customer acquisitions.
Therefore, it is very important that you deal with customer service problems almost immediately. One of the first steps should be to implement a feedback plan where customers feel they can tell you their grievances. Then, when you have a complaint, you must act and try to resolve the issue. An unhappy customer who has been given special treatment could be turned into a brand advocate.
You also need to train staff to be customer-centric and empathetic to your customers. Then you can start to spot gaps in your customer service treatment.
2. Too few features
Not every product is the same and sometimes customers are lured away by competitors because they have a product that has more functionality that is aligned to their needs.
Your competitors have therefore successfully developed something that more closely matches the needs of your target users than what you have on offer. To avoid this, you must know what your customers want and match their needs. Also, it is important to keep tabs on your competitors and what they are offering, including new features and processes.
3. Too many features
Sometimes you can have the opposite problem with customers wanting a less complex product. If they find a competitor is offering this for a smaller monthly price, then you could end up losing the customer.
To ensure this doesn’t happen, use a tiered model and pricing structure to meet the demands from different customers. This can also be a good marketing tool and a great way to introduce clients to basic packages by offering a premium option to your main, larger product.
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Sometimes your price is the reason why customers are leaving your subscription service. This is usually the case when something else is upsetting the customer. For instance, they might have had a bad customer experience or find there are other organizations offering similar services.
To avoid this, you need to keep your pricing competitive but also determine what the true reason for their departure is. If you can correctly identify this and then solve the issue, your pricing strategy won’t be too much of an issue.
Customers leaving your business’ SaaS subscription can be disappointing. At the very least, if the customer churn is large enough, it will affect your revenue and diminish your profits. So consider what the reason is for customers leaving your business and find a solution to fix the gap. Also dive deeper into some types of churn metrics for a better understanding of this topic.