3 Mistakes that are Hurting your Churn Rate (and How to Fix them)
Are you losing more customers than you’d like? Have you tried everything but they just keep leaving? If so, you’re not alone. In fact, 30% of SaaS businesses have an unacceptable churn rate. In this article we’ve listed some of the most common mistakes businesses make that negatively affect their churn rate.
#1 Not Listening to your Customers
Angry and upset customers get a bad rep. Afterall it doesn’t look good to have an upset customer on social media. However, at least they are giving you much-valued feedback on how to improve your product. It’s easy to listen to them.
But what if the majority of your customers are polite and silent, leaving without telling you why? This is when it pays to follow up. If you don’t have a lot of customers, it’s much more manageable to follow up via emails and keep track of the responses manually. But as your team grows, you’ll need a more robust system (such as a CRM) to keep track of all the cancellation reasons.
#2 Not Providing Enough Value for the Price Point
It’s easy to tell you to lower your price point. But maybe your price point is already low (or even free) and customers keep leaving. This is when it makes sense to do a quick competitive analysis of your features and price point compared to the competition.
See what features you have that your competition doesn’t and vice versa. Once you’ve created your competitive analysis chart, you’ll be able to better price your product and see what features you need to work on. Feel free to post your competitive analysis chart on your website to show customers how you rank next to the competition.
#3 Slow or Inadequate Customer Service
Customers these days expect quick customer service. Long gone are the days where customers would wait on the phone for 30 minutes to get help. According to a report by Zendesk, 92% of customers feel satisfied when they use the live chat feature. If you don’t already have live chat enabled on your website you might be increasing customer attrition by not addressing their question or problem right away.
The good news is that setting up live chat is now easier than ever with companies such as Intercom and Live Chat Inc providing an intuitive platform. Make sure to train your live chat support team to always ask customers for the reason of their cancellation to start finding patterns right away.
So there you have three mistakes that may be impacting your churn rate. What are some other mistakes you’ve found and how did you fix them? Let us know in the comments below.