A creative comparison of the 10 most common reasons why SaaS customers churn
The 2003 romantic comedy, ‘How to lose a guy in 10 days’ is a cult classic.
But what if we applied this theory to customer engagement?
Let’s take a look at what you might be doing wrong and use these pointers to lead you to a happily-ever-after relationship with your customers.
Day 1: Oversell your product
“Clients are people, not fish. Don’t ‘lure’ or ‘hook’ them – engage them, listen to them and serve them… This is much more than a semantical argument – it’s a philosophical shift in thinking, and a practical shift in acting.” Mike Myatt, Chairman N2Growth, Inc.
Myatt points out in the Inc. article that if you want to increase revenue, you actually need to STOP selling.
Growing your loyal customer base is not about selling, it’s about establishing a solid rapport with them and getting them to trust you and what your product can do for them. It’s shifting your thinking to fully serve your customer, and then putting this mindset into action.
Day 2: Surprise your customers with hidden costs
“Your short term gain will never match your long term customer loss.” Small Business Trends’ blog
Do you have hidden costs? Or small print that is very easy to miss? Perhaps you have a clause that requires customers to keep on paying for a year after they’ve ended their contract with you because they didn’t cancel within a six-month time frame, for example.
Think about one of your customers; they want to be in this for the long-haul and build a solid relationship with you and your brand. For SaaS companies, you need to be transparent and upfront with your pricing model and contract. Are there things in the contract that the customer needs to be particularly aware of? Are they expected to pay more for a certain feature etc.? The element of surprise is not a good thing unless you’re offering a discount or an incentive or a thank you email, of course.
Day 3: Don’t exceed expectations
“Remove time as a measure of quality and concentrate on getting your service right. Don’t ever make a customer feel rushed.” Mark Taylor, SuperOffice
Building quality customer relationships isn’t that much different from building any relationship. You have to put the effort in and get to know them.
It isn’t about just meeting expectations, but about exceeding them.
As a business trying to thrive, you simply can’t afford to use dubious tactics and have a poor customer experience.
The only way to gain loyal customers is by delivering what you promise – and then going beyond that. Some examples could be:
- Gather customer feedback to see what your customers expect from you
- Use omnichannel technology
- Ensure your employees deliver an exceptional customer experience (via offering them an exceptional employee experience)
- Focus on personalised communications; Thank you emails, happy birthday messages, informative content, incentives
- Focus on nurturing and strengthening the customer relationship
- Apologize when you need to! Take ownership and be humble
- Focus on quality and don’t make your customers feel rushed
Day 4: Fail to personalize the customer journey
“Customers don’t buy from companies. They buy from people – your people.” Jeff Haden, Contributing Editor at Inc.
For SaaS businesses, customer success agents must focus on personalizing the customer journey as much as possible. Remy Claret, who has over 15 years of experience in customer experience management, gives the advice that each engagement you have with your customers should be different. As Claret puts it in his piece on things you need to do to drive your customers away, you should:
“Always strive to mismanage customer journeys by making it hard for customers to connect with your brand in a consistent way, keeping them confused and guessing with every interaction, every time.”
Personalization also means being personable. At Userlane, we make sure that each customer comes with a dedicated customer success manager who will focus on that customer specifically and build a relationship built on trust.
Day 5: Be insincere
“This may surprise you, but one of the most important communications between you and your business clients is a sincere expression of gratitude. It seems so obvious, yet in our transactional business world, a simple “thank you” is often overlooked.” Michele Bailey, president & CEO of The Blazing Group, Forbes.
The key is to remain genuine. People know when you’re being insincere and not actually interested in their needs, wants, and pain points. Customers are paying you – often quite a large sum of money – and they’re trusting you and your product to deliver. They chose you for a reason, and they expect results.
Take advantage of the seasonal opportunities and other small milestones, meet face-to-face when you can, get to know your customers and congratulate them on their successes.
Day 6: Be reactive rather than proactive
“If your team is being forced to operate in a firefighting mode, then your best customers are going to be neglected and upsell opportunities are going to be missed. To have revenue growth you need to not only retain your current customer base but continue to expand your products and services within those accounts.” ChurnZero
In other words, don’t wait for an error to occur and then have to react in firefighting mode. Identify the fire early and work on extinguishing it before your customers even have to get involved.
While you can’t always avoid being reactive, it’s crucial that you always strive to be as proactive as possible. According to customer service expert Shep Hyken, “one of the most effective ways to create customer confidence is to practice proactive customer service.”
Day 7: Mistake? What mistake?
“By being proactive about the problem and honestly claiming your errors, you’re actually very likely to endear your staff and customers to you even more.” Matthew Toren, co-founder of YoungEntrepreneur.com, for Entrepreneur.com
By taking responsibility for your mistakes, you’re putting the power in your own hands. Here, you can then tell your customers that you are actively working on solving the problem. You can even take it a step further and offer discounts or refunds if necessary.
It’s easy to give excuses or become defensive about why certain things went wrong. But actually admitting that hey, yeah, we messed up, goes a long way in establishing trust. Research based on social psychology shows apologies can repair broken trust. If you can take responsibility for any mistakes that have happened along the customer journey, your customer is definitely more likely to be more forgiving.
Day 8: Ghost your customers
“Relationships are built right into the (SaaS) revenue model … No other business model in history gives us entrepreneurs such alignment with their customers.” Patrick Campbell, Chargebee
Customers waiting for you to respond to their questions or queries is costing money. By not giving them attention, you’re essentially saying your time is more valuable than theirs.
Customer churn is closely linked to an unresponsive customer service team. Keep communications open, and don’t make it hard to reach you.
Day 9: Focus on money
Taking care of customers, even when you don’t make money, is sometimes the right – and nice – thing to do. It shows you care and can go a long way in creating customer loyalty. Twitter, Shep Hyken (@Hyken)
Let’s look at Airbnb as an example. It may surprise you that they are not profitable. Founded in 2008, they have raised $4.4 billion in funding, and around 193 million bookings were made in 2020. Chances are, you have booked with them before yourself.
Yet, they made a 30 percent loss year-on-year, notably linked to the coronavirus pandemic in 2020, but ahead of the pandemic, their operating losses more than doubled in the first quarter of 2019 compared to the previous year.
Sometimes the most profitable companies are not the most profit-focused. Sometimes it’s about creating the best customer experience that will set you up for success in the long run.
Don’t let the profit completely dictate how you operate your business: By focusing on your customer, you’ll generate those profits!
Day 10: Don’t let customers innovate
“Innovation is how companies solve a problem in a radically different way to improve people’s lives.” Gary Nakanelua, Forbes
Innovation does not just come from your boardroom. It can come from your customers too.
Customers love your solution, but your solution needs to grow as your customers’ needs and wants change.
In fact, by conducting a study on over 1193 successful innovations, Eric Von Hippel from MIT discovered that a substantial 60% of these innovations were actually from customers.
So get feedback from your customers. Tune in to what they have to say. You can even make your product roadmap public and invite your customers to see what’s happening and contribute to your product’s development.
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