Posts Tagged ‘Understanding’

How to Prevent Free Trial Abuse

Monday, March 6th, 2017

FEATURED_How-to-Prevent-Free-Trial-Abuse

If you’re like most SaaS products, you offer a free trial to new users. Research from Chart Mogul found that 97% of SaaS companies offer free trials, but only 39% offer a forever free tier. This shows that most companies use free trials to usher users into paid accounts.

There will always be people who never intend to buy your product and just want to get something for free. You’ll never be able to completely stop free trial abusers, but those people were never going to be customers anyway. It’s just something we have to deal with.

Nevertheless, it’s important to deter free trial abusers as best you can.

Free download: How Long Should You Make Your Free Trial?

What makes a SaaS product easy to abuse?

saas-free-trial-abuse

Some SaaS products are easier to abuse than others. You’ll attract more abusers if your tool meets any of these criteria.

  • The product is a low-touch tool (meaning anyone can sign up to your service without speaking to one of your representatives).
  • The product is consumer-facing (meaning you sell to people, not businesses).
  • Setting up an account is lightning fast.
  • Setting up an account does not require clicking a confirmation link in the user’s email account or in a mobile phone text message.
  • The product does not require any advanced or time-consuming integrations with other products; no special code needs to be created or an API accessed.
  • The product doesn’t require significant customizations or data imports.
  • The product can be used effectively immediately after sign up.

If your product meets any of those criteria, try changing something so it becomes less appealing to habitual abusers.

Understanding abuse

Your first step is to look at abuse critically, not personally. If people are abusing your free trial, it doesn’t mean they want to cause you harm. It usually means you don’t understand what they find valuable. What you see as abuse points are actually the customer’s value points.

Customer success expert Lincoln Murphy says it nicely: “So these ‘abuse points’ are where value is realized by the customer, at least from a functional standpoint; in this case, the functional standpoint is that they completed the ‘job to be done’ with the product.”

For instance, let’s say you charge $99/month for your product. You notice that the same users keep signing up with dummy email addresses and using your 30 day free trial. There is a chance that these users aren’t unwilling to pay you anything, but that usually isn’t the case. What these users are telling you is that they don’t believe your product is worth $99/month.

In this example, you can fix the problem by adjusting your pricing model, changing your free trial period, or improving your product so it provides better value. You should also find ways to demonstrate the product’s value so users understand the potential. You may even want to speak with one of the abusers to see what it is about the product that has caused their behavior.

Require a credit card

saas-credit-card-prevent-abuse

Many SaaS products allow users to create an account and use the tool with just an email address. After the free trial period, the account locks and requests that the user input a credit card to pay and continue using the product. At this point, some people will use a new email address to setup a new account with your SaaS and continue working for another free month (or however long your trial is).

You can work around this a bit by requiring a credit card when the user originally signed up. Notify the user that you won’t charge the card until the end of the free trial period, but that you need one immediately.

Another method is to lock certain features behind a credit card requirement. For example, an online store platform might allow users to experiment with features and set up their store for free, but launching the store (making it public) requires payment.

People who intend to buy the product (if they like it) should have no problem with this. If they decide the product isn’t for them, they’ll just go through your cancellation process. But users who never intend to buy the product at all will be deterred.

Will this requirement turn off some legitimate users? Yes, it may deter some people who honestly wanted to evaluate your product and ultimately reduce your number of signups, but not as much as you think.

Neil Patel, founder of Quicksprout, ran an experiment where he offered users A) a free trial with a credit card, or B) paid from the start with a money back guarantee. People preferred the free trial, even though it required a credit card at the start.

Requiring a credit card can improve your lead quality because you know your users are willing to pay. You’ll have to decide if a loss of those people is greater than a loss of potential abusers.

Create barriers for new account

Your other option is to create barriers that are difficult for users to overcome twice. Here are some ideas.

1. Require a mobile phone number

Most people only have one mobile phone number. They may live or work with someone who will let them use theirs, but there’s a limit to that. It’s possible to set up Google Voice numbers and forwarding, but that takes a lot of effort. When the user inputs a phone number, require that they return the confirmation code you send by text message.

2. Track user IP addresses

Set up an alert that shows if multiple accounts are created from the same IP address. This isn’t foolproof because some networks will show the same IP address for everyone using it. If you discover multiple accounts with the same address, you should do more investigating to see if they’re using the account in a similar way (same brand name, for instance).

3. Place a cookie on the user’s computer

You can install a cookie on the user’s computer that your application will check for during the account creation process. If your app recognizes the cookie, it should prompt the user to log into their other account. Cookies won’t stop everyone because they can be easily removed, but this tactic will impede users who don’t know how to clear their browser.

Change your app

If you’ve implemented any of those strategies but you still have problems with abusers, you can switch from a paid tier model to a paid usage model.

An example of this model is MailChimp. MailChimp allows anyone to use their service for free until they have 2,000 subscribers. After 2,000, the account begins to charge a fee that rises as the number of subscribers increase.

In this case, the whole point of MailChimp is to communicate with their subscribers. Users naturally want more subscribers. It’s possible to spread a subscriber list across a series of accounts so each account is beneath the free limit, but that would require a tremendous amount of work and organization on the user’s part. It’s easier to pay the fee.

Download this free resource to determine the proper length for your free trial.

If you can find a way to structure your pricing model so users only pay for what they use, you can closely tie the product’s value with honest use.

Best Practices for Creating SaaS Documentation

Monday, February 6th, 2017

FEATURED_Best-Practices-for-Creating-SaaS-Documentation

Even the simplest, cleanest SaaS applications have problems that require support. Providing support to your users and customers is a critical part of operating any successful business.

The beauty of a SaaS product, however, is its scalability. You can service thousands of customers with minimal staff. One of the ways you do that is by making a plethora of support documentation available on your website.

Documentation benefits you and your customers in a few important ways.

1. Customers onboard faster

Onboarding is about helping your users find value in your product quickly so they continue to use it (and convert from free to paid tiers or renew their subscription). Documentation doesn’t replace your onboarding process, but it should support it by offering additional information. It’s also available in case new users have questions.

2. Your team operates and scales faster

Documentation can be used as internal training materials to help new employees become familiar with your product. It also reduces the amount of time you or your support team spend answering customer questions. They can quickly link customers to already-prepared documents.

3. B2B clients don’t struggle with employee turnover

Your B2B customers will likely change employees ever so often. If you rely on live trainings, you’ll be forced to repeat your presentation over and over or leave the customer to figure things out on their own (which might incur costs on their end, something you don’t want customers to experience).

4. Reduces the likelihood of churning

Any time you can reduce friction in the customer experience, you reduce the chances of a customer churning. Documentation turns moments of frustration into moments of value.

So how do you create truly valuable documentation?

Download this free checklist to use each time you create a support document.

Prioritize what you create

Naturally, some of your support documentation articles are going to be more valuable than others. Some features, screens or actions are going to be used more often. Many users will have the same problems, while others will experience less popular challenges.

It would be great if you could create all of the documentation at once, but that usually isn’t the case. You can only allot so much time each week or day to this task because there are other tasks that need doing. So you have to prioritize the order of articles you create.

Talk to whoever handles customer support or customer success for your SaaS. What types of questions do they get most often? What types of complaints do they receive? What questions do customers ask with a sense of urgency? What problems do customers have that prevent usage of the application?

Your goal should be to remove as many obstacles as quickly as possible. Prioritize your documentation by targeting the most common problems your customers have, or the most serious problems (like being unable to log into the application).

Craft searchable titles

People don’t search for features. They search for solutions to their problems. Your titles should reflect their concerns so they can easily find answers.

Let’s say you have created a social media scheduling tool. Users need to integrate their social media accounts before they can schedule any posts. Even though you make this feature apparent, some people will inevitably need help. Their problem is urgent because they can’t use the application otherwise.

If you explain this feature in a support document called “Social Media Integration Feature Explained,” your users will have a hard time finding it. Instead, focus on their problem. A better title would be “How do I link my social media account?”

Here’s an excellent example of what not to do. These titles are tough to scan because they all start with the same words, which aren’t even relevant to the search.

saas-documentation-titles

Image source: screensteps.com

Only answer one question at a time

You won’t do your customers any favors if you merge multiple support topics into one article or page. Keep in mind that your users won’t read your documentation for fun. No one will read your documentation page-by-page.

Instead, they’ll search through it when they have a specific problem, so each page’s title needs to clearly relate to the page’s content and nothing else. If you cram too much information into one page, it will be hard to find.

Let’s return to our example of a social media scheduling tool. You might have a comprehensive article on scheduling social media posts for training purposes, but you should also have articles that address individual features. You might have one called “How to schedule a social media post,” one called “How to delete a scheduled social media post,” and “How to edit a scheduled social media post.”

Stay simple and actionable

Like I said, no one reads support documentation for fun. Users will visit those pages on your site only because they have to. At this point, they are already frustrated with your product, so you have to do everything you can to reduce their burden and provide a solution quickly.

You can do this by keeping your support documents simple. Don’t dig into details about why your product functions the way it does. Don’t bore them with unnecessary information. Certainly do not give them a history of how the product used to be, because that would cause confusion.

Be succinct and actionable. Answer direct questions. Put your content into scan-able, digestible chunks so readers can quickly find what they need. If your document explains a multi-step process, style it as a list so the steps are clear.

In short, do whatever you can to reduce the barriers between your users and solutions to their problems. Notice how this MailChimp knowledge base article jumps right into actionable solutions.

mailchimp-knowledge-base

Assign topics to people throughout your organization

As your SaaS grows, you might hire people who are more knowledge than you on certain topics. It’s smart to have documentation written by the expert. For example, you would want someone acutely familiar with the technical side of your product to create documentation around your API.

If you have a customer success team, it’s usually best to let them handle documentation. They are intimately aware of the user experience and customer problems.

Even if you are capable of writing all the necessary topics, I recommend assigning some to your team anyway. Documentation is one of those tasks that’s easy to push to the bottom of your to-do list. When no one really owns the responsibility of doing it, it may never get done. Each week, assign one topic to each person on your team to keep the process moving.

Iterate just like a product

Your documentation is all part of your software-as-a-service. Like any other component of your product, you should refine it over time. Add articles as customers ask questions. Encourage everyone in the organization to take note any time they come across a topic that would be suitable as a help article.

You can expedite your article writing by leaning on your support staff. Have your support team copy you in on conversations with customers. You should be able to lift the solution they provide straight from that conversation to craft an article.

Finally, review your documentation at least yearly. If your product goes through any type of fundamental change, it would be smart to go through every article and make the necessary changes. Sometimes just updating screenshots to your new interface can encourage more engagement with your application.

Use this free checklist to make sure every support document is effective.

Ultimately, documentation helps you retain your customers by pre-providing solutions to their problems. If you want to maximize your retention abilities, get your invitation to Retained today.

Which SaaS Sales Model Is Really For You?

Monday, February 22nd, 2016

FEATURED_Which-SaaS-Sales-Model-Is-Really-For-You-

One of the big challenges, particularly for an early-stage SaaS, is determining the right sales model for the business.

So much hinges on your pricing:

  • What pricing will attract the clients we want?
  • How do we get clients to a paid subscription?
  • What will allow us to be profitable without outpricing our clients?
  • Conversely, if we price too low, can we still profit and will we attract the right clients?

The SaaS marketplace is getting fairly crowded and many SaaS have made the mistake of pricing far too low in an effort to attract large numbers of subscribers. You may attract numbers, but pricing also plays a role in communicating the value of your product to customers. Price it low and it may have lower perceived value. If perceived value is low, how do you hang on to the customer?

On the other hand, if you have a number of competitors who offer something similar to what you do, you may struggle to attract subscribers for $99 per month when they can pay $59 somewhere else.

What might the right sales model look like for your SaaS? Joel York shared the most common models SaaS use:

three-saas-sales-models

Let’s take a look at these…

Self-Service

It’s probably fair to say that a much larger proportion of SaaS starting out in the last few years are using some form of this model than were prior to around 2010. Self-service is exactly as it sounds: the customer is able to self-select, purchase and use the product without needing to discuss with a salesperson.

Fully automating your SaaS is ideal really – it opens up greater opportunities to scale your business because the human touchpoints are limited.

Typically, for self-service to work the product should have relatively low complexity and be priced low enough that there are few barriers to entry for the customer. Customer acquisition, onboarding and payment are all fully automated.

What steps can you take to scale your sales program? Get our free guide here.

When Is Self-Service A Good Choice?

First of all, if you need a lower-cost service offering, self-service may be a good choice. If customers are able to self-select, you save on personnel costs because there is less need for a sales team.

For your customers, self-service will also appeal to those looking to lower costs, so this works only if those are the people you really want to be serving with your SaaS.

As Dan Steinman explains, there is a lower barrier for customers to purchase for a number of reasons. These could include:

  1. Low software costs due to paying “monthly rental” rather than buying a whole software package.
  2. It’s a lower commitment – if they’re not happy they can cancel their subscription rather than trying to return a software package they bought.
  3. There are no direct infrastructure costs because they are absorbed by the SaaS and spread across their whole platform.
  4. They don’t usually need to employ someone in IT as a specialist software operator.

Assuming you have a great-quality product, self-service requires that product be simple to execute, therefore relatively easy for the average user to pick up unassisted. The key to self-service success is really customer access to good information.

You need to commit to ensuring you provide information in a way that is easy for the customer to find and understand. For example, you might offer training modules, set up a knowledge base or regularly email them with relevant information.

If you aren’t able to set up a number of good options to help customers find information themselves, you will shoot yourself in the foot by having an influx of customer service requests to deal with.

The other thing Steinman points out is, if you have a “long tail” of lower paying customers, you need to think carefully about what you’re going to do with them. Problems can arise if you’ve started out by giving them (as he puts it), the “white glove treatment” but want to move to a lower-touch solution. If they have become accustomed to receiving a certain level of service, they may not want to move to self-service

This has happened with a few early SaaS who are eager to acquire and keep customers as quickly as possible. Basically, if you don’t want to have headaches later, start out how you mean to continue and offer viable self-service options from the beginning.

[tweetthis]A self-service SaaS sales model tends to be low barrier to entry for customers.[/tweetthis]

Optimize For Success

It has been acknowledged as a “universal truth” of SaaS that your lower paying customers tend to be your fastest to churn. This means that while you work hard to acquire new customers, you need to have given enough thought and put steps in place (preferably before you launch) for how you’re going to keep them engaged.

Steli Efti made an interesting point in an article on optimizing self-service SaaS models. He describes a self-service SaaS model which has a “secret sales team.” The team is used as a control to reach out to select groups of customers and conduct tests and cohort analysis.

Wherever the human sales team does better than the regular self-service channels, they analyze the results to see how they can incorporate whatever the humans did into the self-service channel. In this way, the “secret sales team” helps the SaaS to optimize their self-service options.

Transactional

This is the next step up; as Joel York points out, there is usually a self-service limit in B2B sales. This happens where there is either a higher price point on your SaaS, higher level of complexity or a combination of both.

“The customer’s desire for instant gratification becomes thwarted by the complexity of purchasing and using your product.”

Complexity will of course be subjective to the client, so in cases where the client understands your product and trusts your brand, you could move to a “mature” self-service model.

self-service-maturity-model

This self-service maturity model is not going to work for every client though. Those new to your brand or technology are more likely to need the reassurance of human contact to convince them to make the purchase.

From another perspective, if you’ve begun by creating a SaaS with higher complexity and price point, then self-service may not be the model to start out with.

The transactional model is a more interpersonal sales strategy where human sales teams are there to onboard the client. This kind of model helps to alleviate fears the customer may have about over-spending a larger amount on software – they want to be reassured that a human will be there to help them figure it out.

When Is The Transactional Model A Good Choice?

How easy is it for customers to pick up your software using self-service training options? You could (and probably should) test this out, but if the answer is that a lot of your target customers won’t get it, then you’re going to need the human interaction to convince them to buy.

Additionally, if your price point is higher than a lot of other SaaS, you will probably need the higher touch solution to gain the trust of prospects. Basically, the higher the price the less willing customers will be to hand over money without the assurance of humans behind the software.

A higher price usually brings with it expectations of a certain level of available service. Customers will look for things like contracts, premium service level agreements and most certainly more access to humans should any problems arise. For them it’s about mitigating risk in their expenditure.

How Will The Transactional Model Be Successful?

With an assumption that you’ve created the best possible software product there’s a short answer to this: get good humans. You need people who are closers and have a true ability to relate to customers, as well as to understand technical aspects and explain them in plain language.

Your training materials which the customer is able to self-select still play a role, just make sure that customers at this level are not left dangling when they really want to speak to a real person. How frustrated do you feel if a website keeps throwing up “knowledge base” questions and blocking you from actually speaking to, or even just emailing someone?

If you’re going to operate on a higher paying/higher complexity model, you need to suck it up and realize that means you will need to make humans available in some form.

Enterprise Model

This is the top tier of SaaS sales models and will generally take the largest amount of work per customer to get sign-ups. Enterprise is for SaaS with products that are so complex and expensive, that a natural customer-fit is those larger, enterprise companies.

enterprise-sales-model

Source: Chaotic Flow

Passkey is a good example of what an enterprise sales model looks like. They tend to sell multi-million dollar, multi-year contracts to large hotel chains.

Everything about the enterprise model is high-touch and high-end, which makes it the most expensive and labor-intensive model for a SaaS. This model is only for you if you have a quality, higher-end product, or if your self-service or transactional SaaS is able to be scaled with bigger features and more capabilities that will be attractive to enterprise clients.

What steps can you take to scale your sales program? Get our free guide here.

Final Thoughts

Your SaaS sales model can make all the difference between whether you succeed, or whether your SaaS dies a slow death as funds run out and costs mount up. Pricing is a huge consideration from this point of view, as well as figuring out the right balance of how high-touch you want your sales to be.

Many SaaS now are largely going for a self-service or transactional model, but if your product is very complex and expensive, enterprise may be your only option.

A key consideration is how well you set up your sales model before you’ve launched. Have the mechanisms in place to start out as you mean to continue, whether that involves good quality self-help resources, hiring the best salespeople or a combination of both.

How Are SaaS Apps Getting Found?

Monday, February 8th, 2016

How-Are-SaaS-Getting-Found-One of the big challenges for any early-stage SaaS is getting found in the sea of other SaaS and technology advances happening daily.

You could be using every possible SEO technique for your website, but SEO alone isn’t going to bring in enough of the right kind of customers in the amount of time you have before funding dries up.

One of the important points to consider in your SaaS marketing is that you want your distribution to be based on the best possible strategies to reach those who fit the profile of your ideal client. You want to be able to target first the areas where those clients hang out so that you’re not wasting time on ineffective strategies. One of your first steps before diving into any marketing is to create those persona/s. Even if you are pressed for time, doing a thorough job of identifying your target persona will be worth it so you aren’t wasting time targeting the wrong areas.

So, once you have those personas sorted, how are you going to reach the right prospects? Here are some of the most effective strategies that SaaS are using right now;

App Directories

There are a multitude of directories out there, but some are better quality than others. Lincoln Murphy wrote about 50 places to promote your app (and then 50 more), but one of the gems to take out of his piece is this “protip”;

app-directories

So, keep those “non-tech” places in mind, but make sure you’re found in the better directories too. As he points out, going through the process of completing all those submission forms will also help you refine your value proposition.

Where to begin? In a scouting various SaaS owners on the web, these directories come up often as being the most useful;

  • Angel.co
  • AlternativeTo.net
  • AppAppeal.com
  • Capterra.com
  • Crunchbase.com
  • FeedMyApp.com
  • GetApp.com
  • G2Crowd.com
  • LaunchingNext.com
  • ReadySaaSGo.com
  • SaaSDirectory.com

There are obviously hundreds of other options available, but those listed have been mentioned often and positively.

[tweetthis]Are app directories the best way to reach your clients? Think about where they can be found.[/tweetthis]

Get Featured

Everyone’s trying to get featured on Product Hunt’s homepage, and while that’s awesome if you succeed, it’s not easy getting chosen since they’re pitched by so many startups. They’re definitely still a good option to try, but in the meantime you should also try to get yourself featured on other sites too.

Groove found that TechCrunch was just as difficult to get featured on, but by reaching out to a number of other outlets (they share their list here), they were soon featured in other places.

Check out that list (which may be a little dated) and come up with your own list of sites to pitch for your SaaS. The best ones to get featured on have these characteristics;

  • Your target audience reads them (so not necessarily just other SaaS or tech-types; your accounting app could be featured on a popular finance or small business blog, for example).
  • They have established a good reputation and are getting strong traffic.
  • They somehow logically relate to you (for example, it could be the blog of a well-known app that you integrate with).

Content

We’re not just talking here about the content on your blog or what you give away as a lead magnet; you need content that goes further than your website to reach a broader audience. Apart from getting yourself featured on other’s websites as discussed previously, get your content up yourself in other places where your target audience can be found.

Free

Free sites that draw a lot of visitors are great, especially if you’ve got a shoestring marketing budget. The downside is that you’ll need to work hard to stand out above everyone else on those sites.

Need some ways to amplify your content? Get our free checklist.

Some free tactics to try:

  • Publishing posts on LinkedIn.
  • Creating engaging SlideShare presentations.
  • Publishing posts on Medium.
  • Video on Vimeo or YouTube, or even quick Vine clips.
  • Posts on Tumblr.
  • Creating and curating collections on Scoop.it.
  • Quora. Answer any questions which relate to something your content covers and post a link to your content in your answer.
  • Syndicate on Business2Community, Bizsugar, B2B Marketing Zone or any other relevant syndication blog.

Paid

There are a number of paid options for boosting your content to a wider audience. You could go the route of sponsored posts on social media platforms (stick to the ones you’ve identified to be the most likely places to find your desired customer), or you could go for paid content distribution through one of the many networks which are now available.

Paid content distribution via a content distribution network (CDN) involves chosen posts from your blog appearing in the “from around the web” or “you may be interested in these” sections which you often find at the bottom of popular blogs. Your post could appear on Huffington Post, CNN, USA Today or a number of other popular sites which allow them in return for revenue from the CDN. If this sounds like something for you, check out Taboola, Outbrain or nRelate which are three of the most popular CDNs.

Partnerships

No SaaS is an island, and you don’t have to do it all on your own. An established partner is a great way of amplifying your reach and broadening your market. You get to leverage their better-known name, larger network and potentially greater sales and marketing resources. A partner could be;

  • An app that yours integrates with.
  • A SaaS who is not in direct competition with you but whose audience is similar to yours. This is especially good if your products are complementary.
  • Channel partners. These are partners who are trained in your product and resell it for their own profit (HubSpot is well-known for this).

Insight Squared describes the following partnership types;

insight-squared

However you decide to establish a partnership relationship, there should be value in it for both sides in order for it to be successful. What is the incentive for your partner to advocate for you?

Email Campaigns

In its simplest form, a partnership could involve someone with a large email list recommending your product to their clients. Lincoln Murphy put together some excellent guidelines on what to do with partnership email campaigns.

It is important in this situation that you establish the goals of your campaign and give some real thought to who you are targeting on their list. What level of membership do they have with your partner? What will appeal to them in terms of benefits and price?

Offers

You could consider offering a deal on a site which offers “daily deals” to visitors. AppSumo is one with a large following who regularly offer deals on products they like themselves. Note that as this write-up from Clickminded states, their clientele are used to being offered a reasonable discount, so things will work out better if you’re prepared to do that.

Of course, AppSumo takes a significant share in the profits of the deal in return, but the benefits of getting a big boost in exposure are the payoff you’re looking for. Deals run for a limited time, but if customers like what they got from you, your SaaS gets talked about and referred to long after the deal is over.

Channel Partnerships

As a general rule, channel partnerships are much more complex to set up, so if you’re at a really early stage, they may be better left until later, when you’re more established and prepared to handle the work involved.

Authorized resellers of your product need to be well-versed in how it works and enabled to resell with the right kind of content and sales materials or mechanisms. Programs generally require structure with a clear path to the benefits for your partner, which takes time to flesh out.

New Breed Marketing suggests you consider these items when deciding if a channel partnership is right for your SaaS;

channel-partnership

Successful channel partnerships re

Get the bonus content: The Content Amplification Checklist
an dedicate someone to managing channel partnerships – if you’re not responsive or easy to deal with, the partner will probably write the whole thing off as too difficult. This is why channel partnerships tend to be better when you’ve already built momentum behind your SaaS and have the time required to establish them properly.

Need some ways to amplify your content? Get our free checklist

Final Thoughts

There are a number of different ways to get your SaaS found which we haven’t covered in this article; paid advertising, content marketing on your website and networking/presenting at events, among others.

The four methods covered here are some of the more effective ways to get your SaaS in front of a larger audience in a shorter amount of time. They are tried and tested by other SaaS with good results.

One of the key things to remember, especially if you are short on time, is to first target the places which are most likely to reach your target audience. Reach is good, but it’s pointless if you’re not reaching the right people.

When you’re an early stage SaaS, moving early to improve your reach will be crucial to secure the growth you need before funds run dry. Try out some of these methods and we’d be interested to know, what has worked the best to get your SaaS found?

Know The Warning Signs That You’re Losing The Customer (And What To Do About It)

Monday, January 25th, 2016

FEATURED_Know-The-Warning-Signs-That-You're-Losing-The-Customer-(And-What-To-Do-About-It)

One of the best things about SaaS business models is the ability to predict monthly income with reasonable accuracy. Subscription software businesses are great for producing reliable income without storing inventory or purchasing stock, but it’s up to you to ensure those subscriptions remain reliable.

Churn is the big SaaS killer, and if you don’t proactively look for and manage signs that a customer is about to leave, you are missing valuable opportunities to keep churn to a minimum.

What should you be monitoring? Here are some of the common warning signs, and what to do about them:

Changes In Pattern Of Use

Clients who log in like clockwork and display regular patterns of use aren’t likely to leave. It is when their levels of activity drop off that alarm bells should be sounding.

As Intercom points out; “Activity churn is where the rubber hits the road. Typical Churn stats use account cancellations as a measurement but cancellation is only ever a trailing indicator. It’s the last thing that happens.”

Customers don’t usually stop using your app all of a sudden and cancel their accounts – there tends to be a decrease in activity over time, which leads to the “danger zone” before cancellation.

activity-churn

Image source: Intercom

When a customer realizes they’re paying monthly subscription fees without getting use from the product, cancellation is highly likely.

Develop an effective complaints process; get our free guide here

What to do about it

User activity is something you should be monitoring so that you can intervene early and try to re-engage them. You could call customers if you have the capacity, but one of the easiest strategies is to send out a series of re-engagement emails.

The idea is to demonstrate to those customers why your product will provide them with value that they need. Different calls to action will appeal to different customers, so you may want to try segmenting your audience based on the emails they show interest in. This way you can take a targeted approach to offering further education or incentives.

You should also examine the steps you have in place already to keep people engaged. Do you need to communicate more regularly? Could you be producing more educational materials, FAQs or even a content library? Give your clients every opportunity to remain engaged in the first place.

[tweetthis]Churn is the last thing happens: monitor activity levels first and be proactive about engagement.[/tweetthis]

Payment Method Is Expiring

Credit card expiry is a very common reason for SaaS churn. On average, credit cards expire every three years, which means that around 2.8% of your customers will have an expiring credit card this year.

Not only do credit cards expire, but there are a number of other reasons that a payment might not be processed. Some of these include fraud alerts, billing address changes, balance limits and the remarkable 30% of failed transactions that are simply due to a computer error.

What to do about it

You can’t predict every possible credit card issue, but you can be prepared for them. Credit card expiry is best dealt with prior to the card actually expiring and the transaction being declined. This is where a dunning and pre-dunning service such as Stunning is your best friend.

Taking care of credit card payment issues is actually simple if you have a system in place. A service which takes care of pre-dunning and dunning will send out emails based on any number of events of your choosing. For example, the expiry of a trial period, reminders to update billing information ahead of card expiry, and dunning emails when a transaction has been declined.

We like this kind of system because it is automated and doesn’t require a huge amount of effort from the SaaS once it is all set up. You could actively monitor your payment system yourself, but that would take away from time spent building engagement and growing your business.

Whatever method you choose, being proactive about credit card issues is a quick win. If you stay on top of this, you should see an impact on churn rates.

Negative Sentiment

Sometimes customers leave without saying a word, but many others practically put up a billboard announcing why they are leaving. If you’re seeing complaints come in, negative comments on social media or even queries as to why your SaaS doesn’t do something that the customer initially thought you did, then you need to take action to address the feedback.

Negative sentiment may not even be expressed directly; you might notice that a client has visited your cancellation page, possibly indicating that they’re looking at leaving. Another warning sign is that they’re downloading or deleting data where you have a storage system.

A business that doesn’t listen to customers doesn’t tend to be one which stays in business, so you need an effective complaints process which lets customers know they are being heard.

Develop an effective complaints process – get our free guide here

What to do about it

A happy customer derives clear value from you and helps grow your business. We’ve tackled simple ways to keep your customers happy before, including finding ways to delight your customers and encourage communication with you.

If your product is great and does what it’s meant to do, negative sentiment is often a result of poor communication or a perception that the customer is not listened to. For this reason, you should always look for feedback and show that you listen to your customers.

Satisfaction surveys are proactive and allow you to keep a finger on the pulse before receiving complaints. People do tend to be suffering from “survey fatigue” though, so we recommend that you keep them straightforward and don’t overuse them. Be open with clients and show that your surveys are worth their effort. You could do this by communicating any changes that you are making “as a result of your feedback.”

Your onboarding process plays an important role in whether customers stick around. You should be setting expectations right from the beginning and showing clients exactly how to get value from your app. This is a vital part of the communication piece, as failing to meet expectations is a common complaint.

If a customer has visited your cancellation page, consider reaching out to them directly. It could have been an accident (especially if their usage is normal), but if it was an indication that they’re interested in cancelling, now might be the time to seek feedback. The same goes if they’ve been downloading or deleting data. It may just be that they’re backing up important files or deleting obsolete ones, but it could be that they’re preparing to leave.

Another important strategy is to use software to monitor events and sentiments which indicate that the customer is unhappy. This is specifically why we built Retained, so that SaaS can monitor insights which indicate how likely a customer is to churn.

status

Your Own Processes Are Cumbersome

We all like things that are easy. How easy are your processes for your customers? This directly relates to the feedback you should be asking for from the last section, but you should also know where any of your sticking points are before asking customers about them.

What to do about it

UX testing is one thing, but you should also be a user yourself. Look for any of the typical things that your customer needs to do (functions of your app, updating payment or account details, asking a question…), be aware of any cumbersome processes and rectify them early.

Getting help is a big one in this regard. Customers don’t want to have to repeat themselves to multiple people or wait an excessive amount of time for a response. You should also look out for anything that is not easy to find. Your processes should be as intuitive as possible, and customers should not need to spend a long time clicking around.

Don’t Leave Anything To Chance…

Reducing SaaS churn involves knowing the warning signs that you are about to lose the customer and proactively managing them.

Monitor customer activity and look for ways to keep them engaged. Stay on top of payments and show customers that you are prepared to listen to and act on feedback.

While growth activities traditionally take up a lot of time in any SaaS, retention strategies should be just as important. It’s much easier to hang on to current customers than bring in new ones.