churn rate

Have you ever felt like you couldn’t keep up with competition?

Almost everyone feels this way during difficult times. Being a SaaS business owner is very difficult. As you are constantly facing newer and difficult challenges.

Sometimes it feels like you’re on an endless journey. And doing everything you can as hard as possible but still customers are slipping through the small cracks. And you can’t give up no matter how tired you are. Otherwise your business starts to shrink instead of growing the way you need it.

Your SaaS churn rate, the percentage of customers (or recurring revenue) leaving your business over a set period of time, is an important indicator of your business. It is one of the best metrics you can use to inform your company and evaluate your performance.

Here’s why it’s important to reduce  your customer churn rate to keep your business healthy and profitable.

What Is Customer Churn Rate?

Customer Churn Rate is one of the most important SaaS metrics to Consider in modern times. It indicates how many new customers you have added. It is calculated as the number or percentage of the total number of customers lost during a particular period.

Churn Rate is also often called the attrition rate.

Mathematical equation to calculate customer churn rate can be defined as :

Customer Churn Rate = (Total Lost Customers ÷ Total Acquired Customers) x 100%

Pro Tips That Will Surely Help You Reduce Churn Rate in Your SaaS Business.

#1. Identify At-risk Users

We strongly believe that identifying churn characteristics is a great way to avoid them.

You can get the most out of a healthy customer by collecting data on how you use your product or service. This information will help you to identify potential customers. Once you have identified these customers, notify your sales team immediately so they can access them to ensure your customers receive the necessary assistance.

Alternatively, you can also plan a unique strategy to reach this segment of customers with a high level of accurate problem solving and resolving their concerns. This test will definitely prevent them from dropping your services.

#2. Start Managing your Customer Complaints effectively.

Customer service or customer support has become an integral part of today’s shopping experience. Customers are becoming increasingly aware of the importance of quality of customer service in recent times. That’s why it’s important to pay attention to customer service and provide quick solutions whenever needed.

One of the many ways to improve your customer service is to use a VoIP phone system, which allows you to connect to the Internet and manage calls from anywhere, such as an office or remote location.

Customers who are happy with your customer service will definitely be your most powerful product ambassadors, recommending your products / services to their friends and family.

#3. Get VoIP Phone Number To Connect With Customers

Improper customer service is another major cause of high churn in SaaS service. However, you can overcome this limit by using the  services of the VoIP number or the Virtual Phone System – Voice over Internet Protocol (VoIP).

VoIP allows you to make and receive calls over a broadband internet connection instead of a traditional or analog line. You can also receive customer calls while sitting in an office and in remote places anywhere in the world with the help of a VoIP Phone Number.

#4. Grow Your Customer Feedback Base.

SaaS applications benefit from regular product cycles, and thus its job of the development team to continually improve the system, and minimize any obvious deficiencies. Continued investment in the product means that over time the your product generates more value to its existing customers, and benefits a wider audience than the original beta version. But this will only happen if developers engage with customers first, rather than second guessing want will be ideal for your customers. Building a strong feedback loop so that any initial problems can be fixed quickly will also help ensure that early customers get the real value.

Ensuring that the first versions of your product bring real value to a niche or highly targeted persona helps clear your start with the right foot.

#5. Start Investing in Customer Success

Unless the customer is successful in achieving his or her goals (systematically) their tendency of your customer to leave will remain high.

SaaS businesses that are further established by business customers will usually have a dedicated team tasked with ensuring that new account registrations are successfully deployed, and that the application brings value. They will also identify and take care of the internal Champion employees, who may be able to sell the customer your products, which will finally reduce churn rate in your business

For those who are just starting out at price points where it is not possible to engage with individual customers, the ability of customers to do it for themselves, and to get value without having to engage with support staff is important to ensure that small bars are not demolished.

However, in the early days it is important to ensure that your users benefit from your solution. Do your users are getting onboard successfully? Are trial users upgrading their accounts to paid accounts?Finding answers to all above questions is very important if you want to improve customer services  and customer success in your organization.

#6. Provide Annual Subscription Plans to Your Customers

Giving your customers a discount on long subscriptions is likely to connect them in the long run. It gives you a high revenue per customer, and gives you time to bring a unique customer experience.

The statistics in this case are astounding. A deep study conducted by ProfitWell found that companies that do not offer annual subscription plans to their customers have an average customer churn rate of 9%. Those who offered discounted annual subscriptions found that the customer churn rate dropped to 3%.

#7. Value Over Pricing

Make sure the value and quality offered by your product exceeds the final price paid by the customer. Always follow a method of giving more value than receiving from customers. If the price exceeds the value and quality of the product, your customers will not think twice before finding other cost-effective solutions that serve their purpose.

Also this approach  will increase loyalty of customers towards your product, which will surely help you in the long run.

Summing Up

Lowering the churn rate should be at the top of the list for all businesses. However, in order to achieve this goal, you must first establish a place where customers feel respected. One of the ways you can create such an environment is to use the techniques listed above. We are confident that all of these important strategies will definitely help you achieve your goal – reducing churn rate in your SaaS business.

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