SaaS: Reasons for Software User Churn and How to Avoid It

Getting new customers is 5-25 times more expensive than retaining the existing ones. One of the major benefits of focusing on your existing clients is that it is easier to build their trust in your brand and convert them into your regulars. New customers, on the other hand, are not only hard to find but they may or may not turn into your leads. Of course, you should build marketing strategies to acquire a new audience, but your focus should also be on the existing clients. 

For any SaaS business, a free trial scheme is an important component of marketing. Since your target audience is mostly small and large-scale businesses looking for cloud apps, you need to offer a free trial so that your audience can use the system to understand its features easily. But, what if most of your prospects do not subscribe to the paid plans after the free trial? Or, what if you could retain your clients for only a short period? That’s called the SaaS churn. Here is what causes this low conversion and some tips for avoiding it.

  1. The Poor and Inconvenient UX

You need to provide your customers with a seamless interface that keeps them engaged with your business and improves their interaction. To build audiences’ engagement, you need to leave a good first impression with a well-built and comprehensive product that adds value to your customers’ business. 

You must also keep them up-to-date with the latest features in your product. Every time you release a new product, it must be a better version of the previous model. Remember that customers buy from what they see, not what they hear. They will not subscribe to your services if they don’t find your product good enough during the free trial. 

  1. Speed and Usability

Think about Netflix, Amazon Prime, and other popular subscription-based apps. Not only do they offer speed, but the apps are designed in such a way that users enjoy seamless and smooth navigation. However, unlike these apps, SaaS software is not designed to perform a single task. These are rather complex tools that streamline a wide range of business operations for clients. 

SaaS systems with multiple modules and an array of features are quite difficult to set up. Remember that customers churns when it takes too much time to set up the software and get the first results. Your customers need a frictionless experience, perfect speed, and quick access to the system.

  1. Software with Bugs

Software bugs are not uncommon in the IT industry. The larger your software app, the higher the chances your customers might experience bugs in the system. Even small bugs can wreak havoc on your image, especially if your customers face these issues repeatedly or every time they are operating your SaaS tools. Your customers will not stick around if they experience losses or unproductivity because of software bugs. 

As a SaaS developer, your job is not limited to developing premium and stellar products, but it is equally important to achieve customer satisfaction by fixing bugs. Address your customers’ complaints by working on the problems they are experiencing with your software. Keep all the features up-to-date and modify your modules to build customers’ trust in your company. These are a few easy ways to build customer retention and reduce your churn rate. You must also have a friendly and qualified customer support team that answers your customers’ queries and resolves their issues seamlessly.

  1. Poor Onboarding

SaaS product is not a daily-use service that any non-tech-savvy customer can use without instructions. One of the common causes of high customer churn rates is the lack of proper onboarding. Your customers need to be guided throughout the implementation process.

The right onboarding starts with the IT experts explaining the capabilities of the software to the users, showing the features, and helping them with the setup. This is done to ensure that your audience does not face any problems with your software. 

Onboarding has a significant impact on your audience, after all, it leaves the first impression on your audience. A good first impression often translates into a long-term relationship and a high retention rate. Add a welcome screen and a few sections that show your software features and modules. That being said, this alone is not going to work for onboarding. You need to be with your customers through every step of software implementation. 

  1. Charge Your Customers Upfront

If you have tried any subscription-based services, you must be familiar with the upfront fee structure. Most companies offer two plans – monthly and annual billing. They offer a great discount to those who choose an annual billing plan and pay the cost of using the software for the next 12 months in advance. 

The annual billing or upfront payment for the next few months is a win-win. Your customers can enjoy a huge discount on the product, while you get a high customer retention since customers commit to your software app for the next 12 months. When your customers choose the annual subscription model, they are likely to use the app on a daily basis and renew the subscription if they like your offers.

  1. Focus on the First Critical Phase

The first three months are the most critical parts of your customer journey with your service. This is when they decide whether they’d like to continue using your services or switch to a different software service provider. To maximize your profits and reduce the churn rate, you need to focus on keeping your audiences engaged during the critical phase. Ask them for feedback to understand their experience with your services and give them the reassurance that your team is available at their disposal 24/7 if they need any help. 

Conclusion

To grow your SaaS business, you need to reduce your churn rate since the SaaS churn is the biggest barrier to your business growth. Try the above tips for reducing the customer churn rate and achieving their satisfaction. Good Luck!

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