Thursday, April 14, 2016

3 powerful steps to reduce churn

During 10 years in SaaS business, I’ve found my favorite three step approach to reduce churn. It goes like this:
1) Analyze: Identify the reason for churn
Churn has always a reason. Your SaaS product has already struggled a long way to the market, so there must be enough value in it. What is left is the big question: Why some of your customers leave you? The answer is often surprisingly simple, but comes out only if you change the perspective to your current thinking. For example; the reason might not be in the missing features, but how your users understand the current features. Unfortunately there is no quick magic into this step. Just open your eyes. Once you know what is the real reason for churn, you will also get closer to the customer’s process. That’s why this first step is mandatory before entering to the next one.

2) Develop: Become tighter part of your customer’s process
If your app is not important part of your customer’s process, it’s too easy to forget. For example when I was starting a social collaboration startup (nowadays a growing 100.000$ SaaS business), we carefully gave a thought what could be the identified process where this kind of social collaboration is mostly needed. In this case it was innovation development. Once our product became everyday part of our customers’ innovation workflow, they couldn’t just turn their back on us. We were also able to find new customers easier. The best part is that once you become part of the process, you also start understanding your customers better.

3) Optimize: Know what customers are doing inside your app
This step takes you to a never-ending loop: Optimizing. By knowing your customer I don’t mean asking or even calling to your customers - we are all just people, and people tend to be a bit too polite to say things straight! Your customers might also have a lot of ideas about a perfect dreamland, but in reality they don’t even need the solution what they are asking for.Become a spy instead of perfect customer support. Of course talking with your users is important, but even more important is that you have an overview to the real user log - what features are truly used, how often, how many of your customer’s users are using the feature, from where and with what platforms are they connecting to your app. The devils is in the details!

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