There’s only one thing more gut-wrenching than not meeting your customer acquisition targets: losing customers you’ve fought hard to acquire. It’s a common challenge for SaaS companies that lose, on average, about 5% of customers every month.
Some customer churn is out of your control, like when a payment method fails (called dunning). But there are other forms of churn – like voluntary cancellation – where you have more influence than you think.
The trick is to get in front of your customers at the right time with the right message. Churn management software can help.
When customers click ‘cancel,’ the software steps in with persuasive offers – like trial extensions, pricing step-downs, or discounts. Many churn management software tools also automatically collect customer feedback that helps you make better product, pricing, and marketing decisions.
Growth-minded SaaS companies implement churn management software because losing customers is 7x more expensive than keeping existing customers. Whether you’re trying to reduce churn, increase retention or grow revenue, this solution is a solid choice – provided you avoid some common mistakes.
Like any software, churn management solutions come with a price tag. So, you want to ensure you’re getting a solution you know will be ROI-positive. We’ve seen plenty of SaaS companies so eager to address their churn that they adopt a solution that’s hard to use and even harder to get out of. Here are the five churn management software mistakes to avoid.
When you’ve convinced your leadership to pay for and adopt a new solution, the last thing you want is a complex set-up process – especially because your dev team already has plenty to do.
Avoid tools that require a ton of custom or manual work to implement, update or maintain. Those obstacles will make it harder to realize the tool’s full value. Instead, opt for a seamless, user-friendly, low-code solution that your dev team can implement quickly. For example, ours can be up and running within days.
Integrations are critical because you never want to be tied to the tool stack you have. As you grow, you’ll want the flexibility to swap tools in or out easily. Plus, what you can integrate, you can automate.
To give you a sense of what this looks like, ProsperStack easily integrates with billing platforms Stripe, Chargebee, Paddle, Braintree, Chargify, Recurly, and Zuora. We also integrate with HubSpot, Salesforce, Intercom, and Segment CRMs.
When using churn management software, you’ll want the freedom to change your cancellation flow anytime – without a developer. Adapting your exit survey question or adding branding to create a seamless customer experience should be easy. Like, a few clicks and you’re done, easy. If it’s not, you’re probably underutilizing the tool's capabilities and unnecessarily adding more to your developers’ plates.
Once you start seeing what works, the software you choose should have options to perfect your offers, optimize your results, and maximize your ROI.
For example, can you pit different offers against each other in an A/B test to see which saves more customers? Can you implement a variety of incentive options, or are you limited to just a few? Is the reporting robust enough to provide your product, marketing, and customer success teams with actionable insights?
If the churn management software you’re considering doesn’t allow for customer segmentation, you’ll have a harder time retaining your best customers. For example, if you have a customer who didn’t convert after a free trial, you’d want your messaging to reflect that. If they don’t convert after an attempt or two, it’s probably time to let them go.
In contrast, if you have a customer that’s been with you for years and suddenly wants to cancel, you’d want to send a different message with your best, most persuasive offer. This helps you recoup the revenue that matters, retain your best customers, and increase your LTV.
If you’re wondering how this works, here’s an example: ProsperStack lets you combine survey responses with customer segments based on MRR, plan, billing interval, or custom data from your CRM or CDP to deliver offers to the right customers.
When it comes to revenue growth, a high churn rate is like filling a leaky bucket. Quit wasting time and money on patches and upgrade your bucket instead.
ProsperStack is the only platform that automates and enhances the retention experience so you can keep the customers you’ve already earned. We’re committed to no hassles, incredible value, and immediate impact.
Learn more about the only churn management software you’ll ever need. Sign up for a free demo of ProsperStack.