It’s All About Churn
In SaaS business one of the key metrics that determines your business model viability is churn rate. Cost of Acquiring Customers is high these days with PPC click rates sky-rocketing. You regain the costs over several months, and if your customer churns before you can break-even, then you effectively have a failing business model.
How to Reduce Churn?
Studies show that churn occurs right in the beginning when the customer is not sure they have signed up for the right product or after using the product for a while. A tailored onboarding experience is very effective in reducing churn at the beginning. When users are new to the product and don’t even know about all your features, leave alone how to use them, it behooves you to familiarize them with your product without overwhelming the newcomer. Here are a few things you can do to make sure your onboarding experience is top-notch and leaves your users wanting for more, sticking around hungry for more.
Three things you can do to improve your customer on-boarding experience -
1. Progressive Disclosure - Do not overwhelm your customers with all the features you have built. This is not the time to showcase your technical prowess or your visionary mind, yet! Present them the most used features with simple options and progressively reveal more.
2. Present a Get Started widget – Dropbox does a great job of guiding users through a sequence of steps geared towards increasing engagement and viral marketing.
Engage – Provide hints on features to try based on usage. You can leverage in-app messages and customized emails. Marketing to your existing customers is as important as marketing to find new customers.
How about churn after the initial three-six month honeymoon?
Given how important it is to retain customers long enough to break-even, it is important to predict churn in advance and intervene with the right action. You can use existing customer churn data and mine it to understand what leads to customer churn. Decreasing or low customer engagement is an excellent predictor of customer churn. Setting up alerts to monitor your customer engagement and proactively taking action before a churn can help increase your customer lifetime value and overall ROI on your marketing investments.
You can also trigger automated emails and feedback surveys to engage customers and understand likely churn causes to address any systemic issues.