But it doesn’t have to be!
In a recent survey we did, SaaS companies were asked how customer churn has developed so far in 2024 compared to the previous year. The results reveal a mixed outlook:
- 25% of respondents reported seeing less churn.
- 40% stated that churn levels have remained about the same.
- 35% indicated an increase in churn.
While a significant portion of companies, 65%, are managing to maintain or even reduce churn, a considerable number are still facing challenges in retaining customers. Why are some companies still struggling with churn? Is it because of the macroeconomic situation? Do they provide poor value? Or is it something else?
The answer to this is often a combination of things, and in the end, it can be boiled down to one common theme. Your solution is not considered a critical and vital life-saving medicine for your customers, instead, you fall into the nice-to-have vitamin bucket, which people can be without.
Here are 3 things we see with companies that are reporting unchanged or even lower churn rates:
Nail the onboarding & Reboarding process: Time to value needs to be instant and it all starts with a great onboarding process. We’ve seen companies that invest in their onboarding programs, making sure the customer is adequately set up and can realize value ASAP to reduce their risk for churn down the road. This can include dedicated customer representatives, customized training materials, and proactive engagement during the onboarding phase. Personalized onboarding helps build strong relationships and demonstrates the product’s value early on. An interesting point here is that a focus on Reboarding, meaning, onboarding not just at the beginning of the relationship but frequently throughout the relationship can have a significant positive impact on reducing churn. This is critical to make sure you don’t end up in a situation where your champion leaves the business, moves into a new role, and suddenly you don’t have enough ambassadors or super users left….leaving your solution unutilized and just an expense that needs to be gotten rid of. Kognity has mastered this approach by running regular reboarding sessions for their customers allowing them to bring new users up to speed as well as identify new growth areas while doing so.
Regular feedback loops: How often do you ask your customers, “Are you achieving the expected value, such as increased productivity, revenue, or cost reduction, from our solution?” If you don’t, you might be in trouble without knowing you are. There are a couple of proven ways to understand the sentiment of the customer. Running regular business reviews with key stakeholders from customers, asking them what works great, and what doesn’t, and understanding what more you can do to support their business objectives is key, especially if you have a higher ticket item product. In addition, you can monitor and analyze usage and engagement in your solution to understand the customer’s use cases, the needs of the power users, etc in order to help them achieve their objectives better.
Be the proactive and inspiring partner they need you to be: Customer are expecting you to be the expert, and thus expect to be continuously educated and inspired by you. Gone are the days when you react to customer demand or ask, instead it is expected that you will regularly inspire your customers with ideas, suggestions, and proven playbooks that will help them accelerate their operations. Therefore you need to invest in a customer education program, whether that is webinars, sessions with thought leaders in your space, or running customer cohorts where they can learn from each other, activities that continuously bring value to your customer beyond the software itself. GetAccept is a great example of this, bringing together the revenue leaders from their customers regularly for offsites to learn from each other, while also educating and empowering them to get more of their respective platforms.
Don’t be a vitamin, be a life-saving medicine! Be the proactive partner your customer expects you to be!
