A Software Vendor’s Guide to Customer Churn

Poor customer engagement is one of the biggest reasons for customer churn for any SaaS business. Customers will love your products as long as they enjoy the experience. However, the slightest inefficiency in customer engagement can lead to churn, compelling them to shift to competitor products – impacting the bottom line and the market position. 

Customer Engagement starts with onboarding unless your application is low-touch and product-led; this stage is crucial in determining success. For example, how well is your software being adopted? Do you have measures to track the most used features, and is there constant and consistent feedback to product management and engineering?

Let‘s face it: today‘s customers are spoilt for choice. And suppose you have a limited product portfolio. In that case, it is natural for them to stop doing business with your organization and opt for competitors whose portfolio helps meet all or at least most of their needs.

In addition to seeking choice, today‘s subscription customers expect SaaS businesses to streamline the billing process. For example, the slightest delay or a minor error in billing can cause customers to leave.

Customers have a multitude of needs, but not all of them are aware of those needs. For example, if, as a SaaS business provider, you cannot create suitable bundles or offer the right add-ons, you risk losing customers.

Software companies that cannot streamline or automate their payment processes also deal with a high churn rate. Limited payment options or the reliance on manual billing processes don‘t deliver the peace of mind customers expect from subscription businesses.

Subscription customers today increasingly seek self-service options to accurately track their usage, manage taxes, view invoices, print bills, and more. SaaS businesses that do not offer advanced self-service options often struggle to retain their customers.