Why customers really Churn

"In working with a number of SaaS portfolio companies, I have found that there are two causes of Churn that occur more frequently than any others. ‍
They are: 
• failure to successfully onboard the customer and 
• loss of the champion who drove the purchase."

— David Skok

 

Real reasons why customers Churn

 

  1. Pricing & pricing model — Customers churn because of the way you price, especially true for commodity products.
  2. Value — Customers are not getting timely desired value from the product.
  3. Value is not communicated  — Value is not communicated to the functional, executive, or economic buyers.
  4. Value is not communicated continuously — Value is not communicated to the functional, executive, or economic buyers continuously.
  5. Value and ROI are not communicated to line-of-business executives
  6. Value and ROI are not communicated to non-LOB executives
  7. Customer Success limited to high-touch segments — Customer Success is lacking or limited to high-paying segments.
  8. Micro Pyramids — CSMs are paying more attention to bigger accounts within their portfolio of named accounts. This in addition to we paying zero attention to low and medium spend accounts.
  9. Competitor-driven churn — Competitors are offering better value and a lower price.
  10. Product-customer fit — Selling to customers who aren't a good fit for the product.
  11. Experience — Bad user experiences due to buggy products, bad support, lacking customer success.
  12. Poor Onboarding — Lack of customer education and proper onboarding. You are not providing proper onboarding to users of your product.
  13. Executive Onboarding — You are not onboarding executives and economic buyers. Onboarding economic buyers is equally if not more important. They direct their teams and if they know the value for product provides, they will find time for users to onboard.
  14. Feature bundling — features customers do not need are bundled together, and therefore the price to value ratio does not make sense.
  15. Cash-flow problems at Customer.
  16. Loss of Champion or Executive Sponsor at Customer
  17. Not adapting to Customer Maturity in your customer segmentation
  18. You are using just one account segmentation technique and customers are slipping through the cracks.
  19. Lagging indicators make up Customer Health — and you are not able to correct problems in time.
  20. Not segmenting users — You are relying on User Personas (fictional representations of your ideal customer) versus as User Behavioral Segmentation (users, power users, operators, execs)

 

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