No matter how well you know your product, it takes a special set of skills and experience to truly understand your customer. At the end of the day, no matter how great your product is, your customer churn rate will decide whether you succeed or fail.
Like many others, the SaaS marketplace has become highly volatile as competition is as high as it’s ever been. Take one look at this infographic (also pictured below) and you’ll get a good sense of how things are trending.
With massive growth in the software industry, it’s important to make sure you stay on top of the competition. Naturally, a great way to do this is by structuring product updates that meet the needs of your users.
But this can be tricky, because simply aiming for the “lowest churn possible” is no longer enough. You need to understand the customer, their experience, and position your team to analyze and interpret feedback as efficiently as possible.
Here are 5 specific strategies that you should employ to reduce customer churn:
Enhance customer experience
Sorry for starting off with such a cliché, but it’s true that experience is a fundamental aspect of customer retention. Positive experiences are and will continue to be the main reason why customers continue using your product. As monthly subscription-based models continue to be the popular choice, there are plenty of opportunities for customers to cancel and move to a new product. If you’re paying close enough attention, you’ll know exactly what’s not working for your customers. And it’s this information that will serve as gold when deciding what, when and how to structure updates to your product.
Listen to feedback and implement changes
Customer pain points should be of utmost importance to your team. And today, there’s no shortage of amazing customer feedback forms out there. Just look at what some of the most successful companies are doing:
Research reports and regurgitated statistics may paint a perfect picture of industry trends, you can’t let them lead your approach to customer feedback. Do your research, see what’s working for your competitors, and apply it to your case.
You don’t have to reinvent the wheel here. The premise is simple: identify the biggest issues your customers face and prioritize those changes before anything else.
Be prepared, and don’t fret when you see some negative feedback (because it will come). This is simply an opportunity for more learning and more improvement.
When the customer feedback you get simply isn’t good enough, you may consider using an analytics tool like Heap. Customer data is worth gold, and it will help you make clear, intuitive recommendations for your team to work from.
Communicate everything your product does
Feedback forms are a start, but there’s more you can do to enhance communication and open the door for your customers to interact. Consider this email, sent by SEMrush to this HubSpot writer shortly after she registered. It offers an expansive selection of the services incorporated.
It’s clean, personalized, and unobtrusive to your customer. It’s an opportunity to introduce the entire suite of services you offer and maximize the impact your product is having.
On top of that, this is the perfect way to keep your customer aware of all new product features and updates. Doing so will improve the response you get, increase feature adoption and also provide the opportunity to continue measuring feedback.
Incentives remind your customer that there’s more to the relationship. They’ll see first-hand that you’re actively thinking about new ways to increase their benefit. On top of that, it’s a great way to ensure that the relationship doesn’t grow stale. Long-term customers will learn the ins-and-outs of the product and lose track of opportunities for learning. Innovative incentive programs are a perfect way to revitalize long-term customers by turning them into product evangelists.
There’s also a great opportunity here to boost new customer acquisition through referrals. Jeff Epstein of Ambassador reports that referred customers close at a rate of one in seven. Yes, that is substantially higher than the standard rate for non-referrals.
The customer wants to save money, you want new customers, sounds like a win-win for everybody.
Analyze churn based on your specific situation
Above all else, you need to know exactly what’s happening in your business. Don’t speculate based on trends or research you find online, ask the source. If you really want to achieve results, you must map out a solution that addresses reasons causing your customers to leave.
The principles behind retention can be the same, but every product is different. It could be an issue with functionality or a lack of integration; what matters is that you understand the specific reasons why your customers are churning, and work on a direct fix.
When you work hard day-in and day-out to build optimize your product, it’s a challenge to think about the bigger picture. It takes time and effort, but the strategies above should give you the idea that it’s time worth investing.
Responsive, customer-centric updates will improve the relationship you have with your customers and increase your chances of lowering your churn rates.