Posts Tagged ‘prevent cancellations’

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

Monday, January 25th, 2016


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.


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.


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.

Lessons From Offline Retail To Help You Retain Your SaaS Clients

Monday, December 28th, 2015


How does your SaaS address customer retention?

If you are an average company, your churn rate probably sits between 5% and 7% annually. Less than this and you are among the high-achievers, but if your numbers are any higher, you are heading towards trouble.

Lincoln Murphy notes in SaaS Growth Strategies that 30% of SaaS companies surveyed had an unacceptable churn rate. There are also a surprising number that don’t give churn a lot of attention, focusing instead on strategies to bring in new business.

Given that it tends to be easier to keep a current customer rather than obtain a new one, you should be paying attention to retention!

Business owners often complain that customers aren’t forthcoming about why they cancel, but whether customers stay or go often boils down to similar reasons customers leave any offline business. Here we check out some lessons that SaaS companies can apply from the offline retail world…

What should you be asking to retain more customers? Click here for our free guide

Lessons from offline retailers

Whether a customer sticks with you or cancels boils down to one of two things:

  1. You have a product which provides them with demonstrable value.
  2. Your customer service

Assuming that your product is awesome and answers the needs of the customer, we will focus on elements that set companies apart for their customer service…

Acknowledging the customer

Most of us like to be acknowledged when we walk into a retail store. It communicates to us that the store values our business and that there is assistance immediately available if needed.

Perhaps it is a large store and we are looking to quickly grab one specific item, or we have a question about a product we already bought; we appreciate having someone available to quickly answer our questions.

The same can be applied to the service on your website. A greeting message showing where to get help is appreciated by the visitor who doesn’t want to spend a long time clicking around.

Real-time customer support is on the rise online too, with Zendesk’s Q1 2015 Benchmark Report finding that live chat provides higher customer satisfaction than any other service channel.


They also report that 30 days after implementing live chat, help ticket volumes from webforms plummet, suggesting customers prefer the live chat option rather than waiting for an email response.


A Kissmetrics article points out that live chat is an effective way of gaining direct access to a customer’s pain points. This puts your company in a better position to answer them before they silently cancel.

By implementing real-time customer support you immediately acknowledge the customer and make it easy for them to get the help they need. Just remember to use it wisely! Much like we prefer not to be followed around a brick-and-mortar store while browsing, it gets annoying on websites if your chat keeps popping up and visitors have to keep closing it before they continue…

Taking care of problems

When you walk into a retail store with some kind of problem with your purchase, usually the first customer service person you see can help you, or the next person they refer you to can.

Wordstream reported on a Zendesk survey which produced the following stats:


You’ve probably faced the frustration of repeating yourself to multiple customer service reps before – it usually happens when you are being bounced around on the phone.

How well does your company handle customer issues? The customer should only have to explain their problem once to get it taken care of. Even if your customer service reps need to refer up, they should be introducing the customer and their issue – it’s a basic element of good customer service.

Recognizing loyal customers

How well do you look after your VIPs? Your local cafė gives them a free coffee for every ten or so they buy, while other retailers might offer a percentage discount or cash back for being a loyal customer.

People like to be recognized and loyalty programs tap into that need. A well-administered loyalty program has been shown to work.

Jeremy Smith writes in analysis of effective loyalty programs that they must be simple to enter and understand, provide truly valuable rewards, and require the continual participation of the customer.

It doesn’t have to complicated – perhaps your SaaS could offer an annual discount after 12 months of continuous subscription, free upgrades, or even discounts or vouchers toward complementary services.

Measuring customer satisfaction

What questions should you ask to retain customers? Get our guide here…

Businesses that stay ahead of the curve are tuned in to the sentiment of their customers. Retailers such as Lowe’s and Verizon measure the satisfaction of their customers by surveying them and keeping track of customer growth and churn.

Another important factor that takes into account those who dislike surveys is making it simple for customers to leave feedback.  In a Forbes article it is pointed out that many consumers have “survey fatigue” now and are reluctant to complete them. You will get better information from those who are freely willing to give it (rather than trying to incentivize them), so clearly showing a simple channel for feedback may work better for many companies.

Either way, gathering actionable feedback is key. One feature of Retained gives you the ability to easily measure how customers feel with Sentiments. They will occasionally be asked how they feel about your app, can pick an appropriate emoticon and have the option of typing in some feedback.


Store environment

Think about what you like about your favorite offline store; is it organized and welcoming? Easy to find things? The staff is knowledgeable?

Environment plays a big part in why we prefer one store over another, and all of those things are key components.

If you apply this to your own “storefront” online, how welcoming is it for your customers? They should be able to:

  • Understand the language you use (you need to be talking in their language!).
  • Easily find what they are looking for (you use simple navigation and menus).
  • Be able to connect easily with someone who knows what they’re talking about.

Your online storefront is part of how you serve your current (and future) customers. Just like any offline store, the environment has a documented effect on consumer behavior. A research paper on the online shopping environment points out that excellent website design adds value to the customer experience and has a positive correlation with their level of satisfaction.

Final Thoughts

Taking good care of customers is actually not that complicated, yet a large number of SaaS businesses are churning at a dangerously high rate because they’re not doing so well on the customer service front.

The reasons that customers stay or go tend to be the same reasons you would choose to stay or go at your local offline store. Customer service on any platform has the same basic requirements.

If your SaaS acknowledges customers appropriately, delivers demonstrable value, measures customer sentiment and stays on top of the numbers, and creates an inviting environment where customers can easily find what they need, you are laying the foundation for improved customer retention.

Why Silent Cancellations Can Kill Your Business

Monday, August 24th, 2015



Silent cancellations will slowly bleed your business dry while simultaneously drawing your attention away from bigger problems. Why? Because nearly everyone likes life to be easy. Whether you’re running late and cutting across traffic, looking for a quick bite to eat and heading through the drive thru, or planning a weekend getaway, people are always looking for the path of least resistance.

This is especially true when people have recurring subscriptions to different services. The path of least resistance while your account is in good standing is to stay subscribed – great news for you! The path of least resistance when your account is in arrears is to leave it that way and move on – not so great news. This turns out to be a gigantic problem, because it’s nearly inevitable that most customers will have an issue with their bill processing at some point.

You might be thinking, “What’s the big problem? It’s just the occasional account that will be fixed with a quick reminder email.” That’s possible, but it’s important to realize that the issue isn’t just that a single account has gone bad:that single apple might just spoil the whole bunch.

A Symptom of Customer Ignorance

If a customer silently cancels their account with your company, it’s bad. What’s worse is that it’s a symptom of a much larger issue: the customer doesn’t understand the value they’re getting from you. If the customer knew how much money they were saving, or how valuable your service is, or how their life is improved by subscribing, they wouldn’t let their account go stagnant.

This may seem small at first, but it really is the tip of the iceberg. If this customer doesn’t understand the value, that means you’re not actively communicating it. If you’re not actively communicating it to one customer, that means there’s a good chance that other customers are just as ignorant. If other customers aren’t aware, that means that this silent cancellation that seemed insignificant is actually the first of a creeping wave of cancellations.

This is why it’s so important to address this issue as soon as possible. Unless you do something about it, every month that goes by means increasing numbers of silent cancellations, which spiral out of control quickly.

Irreversible Loss

Every product in the world has a very specific addressable market size. Even the largest technology companies that have billions of users have an addressable market size defined by people who have access to the Internet. These types of numbers are used in calculating the total market potential for many companies.

Now, it’s probably safe to assume that you’re working with a smaller number of customers than the Internet giants. Let’s say there are 1000 people who would theoretically want to purchase your product.

Hypothetically, let’s say that you lose a customer through a silent cancellation. The first thing to realize is that it’s going to be very difficult to win them back. As we addressed earlier, the path of least resistance is the one people normally take. Even when they get an email from you notifying them of an issue with their account, the easiest option is to hit the Archive button and move on with their lives. Some customers will fix their account, and some won’t. Those that don’t fix their account will decrease the addressable size of your market.


What this means in concrete terms is that while you started with 1000 potential customers, you now have 999. One-by-one, they tick away. It’s not linear though – with every customer you lose, you lose potential referrals and potential opportunities to cross-sell them on other products or services. It’s a ripple effect. These are dollars that you could have kept if you had proactively managed your customers’ success, but now they’re dollars that aren’t going to be returning anytime soon.

Need to find out which customers are at risk of silent cancelling their accounts? There are three surefire ways to find out. Learn them now.


No Two Cancellations Are Alike

You might wonder whether silent cancellations are worse than regular cancellations. Unfortunately, the answer is yes. Compared to regular cancellations, silent cancellations are missing a number of features.

If we look at the anatomy of a standard cancellation, there are a few elements that stand out. First, the cancellations are proactive. Second, there is a conscious intent behind the cancellation. Third, there’s typically some warning that the cancellation is about to happen. When you move from a standard cancellation to a silent cancellation, you lose each of these elements. Sadly, these losses are substantial.

Loss #1: Proactivity

When a customer decides to cancel their account, they do it actively. This means that they see the account they currently have, decide they don’t want it anymore, and then take steps to end the account. Compared to silent cancellations, this is surprisingly great: it provides a real metric of dissatisfaction that can be used to make changes in a product. This is contrary to silent cancellations, which at best are a signal that your customers are apathetic.

Loss #2: Intent

When a customer decides to cancel an account, the decision is usually based on clear reasoning. It might be that they’re unsatisfied, or it’s too expensive, or they’ve started using a competitor. Whatever the reason, there’s an opportunity to learn from their dissatisfaction and make changes before the cancellation is finalized. This is regrettably unavailable with silent cancellations.

Loss #3: Early Warning

Lastly and most importantly, regular cancellations provide an opportunity to communicate with your customer. When a customer begins to take steps to cancel their account, you can intercept them before the account is truly closed. This is the opposite of a silent cancellation, which can be unexpected and has already happened before you had any idea it was happening.

Distracted by Incremental Gains

Regardless of the type of cancellation, each cancellation needs to be addressed in some fashion. If a company doesn’t have an automated system in place to reduce the number of silent cancellations, you’ll be stuck manually figuring out a solution for each silent cancellation.

On a practical level, this means that time is being wasted treading water and keeping customers around rather than using your time to grow your business. Instead of building new features, designing marketing campaigns, hiring great new employees, or the thousand other things you can be working on, you’re spending time playing whack-a-mole with a problem that should have an automated solution.

While each time you reconvert a silent cancellation into an active account seems like a victory, it’s more like a draw. You’ve saved a customer, but by focusing on incremental gains you’re setting yourself up to lose ground on a larger level.

The Final Prognosis

Unless you begin to take the initiative and work to prevent silent cancellations, you’re going to be in for a world of hurt. You’ll find yourself with fewer customers, with less insight into what customers want, with time being unnecessarily wasted, and with a slowing growth rate. To be concise, there’s only one prognosis when silent cancellations are shrinking your customer base: the death of your company.