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If recurring revenue is a rainbow leading to a pot of gold, then churn is the dirty leprechaun trying to keep it all from you. We've written before about how to reduce churn in SaaS, so I won’t rehash that here. But what I want to talk about is how we, in the past few months, reduced churn by nearly 70%.

  • LM

    Lincoln Murphy

    over 4 years ago #

    This is a great article and fits nicely into their brand of transparency. Awesome.

    That said, I would caution readers to avoid the very-tempting knee-jerk reaction to just removing the self-service cancel process in your app.

    The real takeaway from that part of this article should be that they were doing "cancel flows" wrong originally by letting people go without ever capturing intel / value from that process or attempting to help the customer get back on a path to success.

    The super-valuable part of the forced cancel friction is that they interact with the customer and get great intel... the fact that they were able to save 15% of cancellations was a nice side-effect.

    Some customers would raise a concern and because they were able to talk to them and address the concern, the customer stayed. Nice.

    Once they have that intel from those customers that want to cancel, my advice is generally to put in a cancel flow that uses that intel to help guide the customer back on a path to success; that requires you to believe that the customer signed-up for your product with the intention of being successful in the first place. Not all vendors/entrepreneurs believe that.

    We covered a lot more on that topic in great detail in this GH thread:
    https://growthhackers.com/questions/ask-gh-best-tactic-activate-inactive-user-wants-cancel/

    An interesting anecdote from my experience is that on several occasions companies have brought me in to help reduce churn and one of the first things we did was to introduce a cancel flow and REMOVE the requirement to call or email to cancel. We found in those cases that churn went down/retention went up even when customers didn't make it to the point where the cancel flow was designed to help them get back on track. It was as if just having the cancel flow available to them that they were good.

    Of course, if they interacted in any way with the cancel flow that was a trigger to reach out to them and try to save them.

    And then you go and make sure people aren't ever getting to this point, right? Maybe do the stuff in point #3 in the article.

    The reason I gave that little anecdote is to show you that no two companies are the same (or at least their audiences/users/customers aren't the same) and that what works for one may not work for another.

    Be careful out there, folks.

  • MB

    Morgan Brown

    over 4 years ago #

    I like #1: removing the ability to cancel via the UI. Aggressive, but the best way to get a chance to save a customer and also learn why they cancel.

  • RS

    Rob Sobers

    over 4 years ago #

    The best part of this article for me was the MRR projection 12 months out at 13% vs. 5% churn. It really solidifies the importance of churn reduction.

  • RB

    Ryan Battles

    over 4 years ago #

    This is a great article, thanks for sharing the detailed numbers!

  • JP

    Jason Perez

    over 4 years ago #

    Hi @shpigford - great write up. I'm curious - how did you know changing the way users cancel would make an impact? Was it a hunch? Was it guided by data?

    • JP

      Josh Pigford

      over 4 years ago #

      I had no idea. Didn't remove it as a way to directly affect churn...just knew we needed better information on the "why" so it seemed like the easiest way to do that. :)

  • SM

    Stuart McKeown

    over 4 years ago #

    Nice, we make it very easy for users to downgrade their plans but we kindof view it as a feature - since the user may use us again in the future. Really liking that you went against the traditional thinking with that one & tested removing it :)

  • EP

    ethan peter

    over 4 years ago #

    great article

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