How to Identify and Prevent Churning Customers

Churn is a challenge that every, almost every single SaaS owner faces in their journey of building their company. So you have to make sure you address it, and that's exactly what we're gonna do today. My name is Akeel Jabbar. I am the founder and GP at Horizon Capital, and welcome back to another episode of SaaS District. On today's episode, we'll be talking about how to identify first and then prevent churning customers in your SaaS product. Identifying at-risk customers. And the way you do that, what I suggest is look at the customers who have a low NPS score. So NPS stands for Net Promoter Score. If you guys are not already using this, I suggest you start doing this from today. My favorite tool that I like to use is called delighted.com. So I'll just make a note here. I have no affiliation with these guys, but I'm just going to make a note because I know they have a generous free offer. Try these guys out. And what that does is it sends surveys out. So you can send an email or you can post a little sticky bar that pops up on your website for users who are using your product, and they get to rate you from a 1 to 10 scale. So you want to find those people who are rating you, say, anything below 5. If they're giving you a 1, a 2, a 3, or a 5, You want to understand why are they giving you a low NPS score. And they're the detractors and the ones who I would consider high risk and are more likely to churn. Number 2, low software usage. So what I mean here is who are your customers that are not using your product as much as they should? Collect data about your customers and how are they using your product? How often are they using it? Did they stop entirely? Or they just started off using it a lot and then they just kind of fell off. So there's a couple of tools you can use there to look through that. If you're using a platform like Intercom or maybe Mixpanel, those are some kind of data, they provide some data around your users when they log into your platform. So I'll just make a note of those 2. So number one is Intercom. Okay. And the other one is Mixpanel. Using those, I suggest you look at, uh, looking at the data that they provide and try to find those customers who are just not using your product as much because they're not going to pay for it if they're not using it. That's plain and simple. So that's number 2. Number 3, uh, increase in support tickets. Okay, maybe there's a customer that just sends out a lot of tickets, they just keep messaging support. Generally, don't, don't ignore that. That's actually a good sign. You're getting data, valuable data that you can actually use. So what I would do is, you know, talk to your support team and collect that data and analyze it for patterns. Is there certain features that these people keep complaining about? They're saying, look, I need this, I just need this product to be added to your system for me to be able to efficiently use it. Are you hearing the same thing over and over again? Okay, is there a certain time of the year? Is it a seasonality thing? Is it every January, you know, when it's a new year that customers are sending in more support tickets because that time of year is just slower for them? Or is it a stage of the journey of the cycle? Are they churning, let's say, after 3 months? They use it for a little bit and then you're finding after 3 months continuously on average that they're just saying, hey, this is not for me. And maybe you're just product, you realize that your product is not good enough to sustain it and doesn't give enough value beyond that 3 months. So just collect data at this point. But look at your support tickets and identify who those customers are and what they're telling you. Number 4, lack of awareness about learning materials. Okay, so you guys spend a lot of time creating videos, whether it's YouTube, webinars, maybe how-to articles, your blog. You create all this fantastic content for your SaaS business, but maybe your customers don't know about it. Okay, you must make sure your customer is aware of these resources. Half of the battle is actually creating it, This is kind of a debated thing. I would say it's about 50/50, and half is actually promoting it. People need to know that you've created all this content. So boost it on social media, add it in your email signature, add it in your onboarding email sequences, add those material exactly at points where they're dropping off and give them those solutions and those resources they need to become better users of your product. Okay, so maybe there's a lack of awareness, in your learning material, see where you're falling off, and then identify where you can start promoting more of your good products. Last thing to identify risks: changes in key points of contacts or change in team members. Okay, if you experience in your business a change of management, or maybe a key personnel like an account manager that's the main point of contact for your clients, you might have a high chance of churning. Okay, so if your management is shifting be sure to distribute that license or that user to a new appropriate contact and let those customers aware because maybe they have that relationship and they built, they're sticking around and working with you guys and your SaaS product because of that key personnel and you want to make sure you don't lose that person because of that change internally. Okay. The next step, deliver an outstanding onboarding experience. So what do I mean by that? Optimize your onboarding experience by making sure your customers see the value of your product as soon as possible. And that's what I talk about as the time to value. So your time to value is from the time that they onboard to when they actually see the real benefits and the aha, wow, this is well worth what I paid for. Okay, so maybe that, you know, the salesperson has shown a demo, they've walked through the product with them, they've shown them exactly what it does, but they don't believe it until they see it and feel it and see the benefits for themselves. So during the onboarding process, walk them through how to use your product, how to use every product and all the features of it with them on the screen or in person if possible until they say, wow, I can't wait to use this product. Create personalized milestones and make sure they're actually following through on it. So maybe every week say, hey, I want you to use these features, set this section up, and by the next week we'll work on this one, and then by the end of it, the whole onboarding experience is and they feel they've got an outstanding experience. Use triggers to automate tasks when at-risk behavior is detected. So we talked about, for example, low usage of your software. Let's say, for example, a user hasn't used your product for about a month now. They haven't even logged into the product. So what you wanna do is use automation to monitor those behaviors for you and then set up triggers so that these next steps and at-risk customers are detected and then assigned, for example, to a customer success or customer support agent. And what that does is you're being now proactive again. So they're going to say, hey, this guy hasn't used it for a month. Maybe I need to give them a call and say, hey, what's going on? Is there something I can do to help you with your product? We also talked about low NPS scores. Maybe you get a couple of people who have a below 5 NPS score. A trigger is made with something, let's say, a Zapier integration. And maybe a ticket is created to reach out to them and try to get that sorted out as soon as possible. Okay? So that's some of the things you can use to automate that, those behaviors, and you're not waiting until they churn. Start the renewal process as early as possible. Remind the customers of the renewal time before it actually happens. And let's say they're about to renew, you have a 1-year contract, it's month 10 or month 11, And you don't want them to show up, wait for them on month 12 and say, hey, I wanna cancel. You wanna remind them of the value and the product that your product provides to them well before it happens, before it expires. In addition to planning early, be proactive with your engagement to solve those issues as quickly as possible and provide feature updates before customers even know that they need it. So what I would suggest is if you have features in your roadmap that are coming up in the future year, Let them know about them, get them excited about it. Because maybe they were thinking of churning because they didn't have the certain product, but 2, 3 months before they're about to churn, say, hey, just wanted to reach out and let you know we've got this ABC feature coming out, we're rolling it out in the next couple of months, I can't wait to show it to you. Now they're more excited and they feel like they're going to be getting something better if they decide to renew. Finally, provide cohesive communication. Make sure everyone within your organization and team has access to all the material that they need to engage with the customer. So do they have the best practice resources? Do they have all access to the customer data? Can they just go in and see what's going on or do they have to reach out to 10 different people to get the information they need? And make sure that they have those touchpoints of what the customer has been told in the past. Do they have the standardized next steps on how to reach out to customers and provide some goodwill? Do they have— is everybody on the same page and can intelligently engage with the customers? Okay, so make sure everybody on your team is on the same page how to deal with customers, how to deal with issues, and know what's going on so we can deal with them as effectively as possible and at the end reduce your churn. All right guys, so that is it. That is the core Message of this video. Identify it as soon as possible, monitor it at all times, and be proactive and engage with your customers. Hope you guys enjoyed this video. My name is Akeel Jabbar. This was another episode of SaaS District. If you guys liked it, make sure to like this video, subscribe, and comment below on what are you guys using to identify and reduce your churn for your SaaS business? I'd love to know. Uh, comment below, and I'll see you guys on the next episode.