Robert Graham — "How To Systematically Fight SaaS Churn And Win"

(This article is part of the MicroConf 2015 Recap. Want to explore more talks from the event? Go back to the Recap Hub)

Main Concept

$66,022.73 — This is what you’re losing if your churn is worse than average. Let’s talk about how to fix this. 

Help your customers get successful with what they need right now — and help show them how to be more successful

Talk Recap

What is SaaS Churn?

  • If you have 100 customers in April and lose 10 of them, you have 10% Churn
  • Start with 500 users paying $59/month growing 12% per month
  • 5% churn? 10% churn? How does that affect your earnings?

How much does SaaS churn cost?

  • How much you can spend to acquire a customer depends on churn.

Customer Engagement

  • Churn represents someone’s loss of faith in your business
  • Coming to them at that point isn’t very productive
  • What we want to do is make these people successful at the start of their engagement with your business

Customer Engagement

  • Analyzing Subscription Revenue. Three things to consider:
    • Recency
    • Frequency
    • Monetary
  • Establish a habit of a financial relationship with people

Activation Maps

  • You want events to make sure that people are getting onboarded
  • You want to track things that help get people more engaged with your application
  • You also want to track happiness
    • …but as a proxy
      • …so ‘how recently have they’ or ‘how frequently do they’

Simpson’s Paradox

  • A trap when not using cohorts
  • Combining two groups — A and B — can give false information
  • You need to look at this information broken out into groups to give yourself a better perspective on what works well.

Cohorts!

  • Consider calender cohorts — when did they sign up?
  • Consider plan cohorts — what plan are they using?
  • Consider action cohorts — what actions are they taking?

Your Action Items

  1. Automate behavioral communication by focusing on high-value people
    • Send them ideas, send them feedback, send them reactivation emails
    • Help tell the customer what pitfalls to avoid
  2. Extended Onboarding
  3. Services — Outreach, Products, and Training
    • Provide value in different forms so that your audience can pick what works for them

Negative Churn

  • When Upgrade Revenue > (Downgrade Revenue + Revenue Churn), you’re losing money

Customer Engagement

  • When you see customers successful, it makes you want to make your customers more successful
  • Help your customers get successful with what they need right now — and help show them how to be more successful

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(This article is part of the MicroConf 2015 Recap. Want to explore more talks from the event? Go back to the Recap Hub)