Why do customers churn? - Deepstash
Why do customers churn?

Why do customers churn?

Price: Asking customers to pay top dollar for a product, especially if they aren’t experiencing the value to make it worth it can quickly wear thin with decision-makers.

Product: many times, customers purchase a product based on what it can do to make their lives easier. If this product isn’t living up to expectations, or if promised features aren’t being delivered, the customer will churn.

Competition: if you’re a SaaS firm, there will always be someone out there delivering the same thing and if their product becomes too appealing, there is often little you can do to pull them back.

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MORE IDEAS FROM 10 Common Reasons Customers Churn – and What to Do About It  | ClientSuccess

CSMs can prevent customer churn by constantly being on the lookout for warning signals and being diligent about proactive engagement. When customers do churn, do diligent follow-up and ask questions to understand better why this termination is occurring.

By tracking why customers churn over time, your team can identify themes and repeating issues that may be contributing to customers leaving and then be proactive in solving them.

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RELATED IDEA

1. Actively vet your leads

Marketing needs to be laser-focused on generating leads that fit your ideal customer profile in order to reduce churn. We do this because it is inevitable that some poor-fit leads will still be generate and passed on to the sales division. 

Questions to guide with vetting:

  • Is your sales team trained and actively encouraged to vet and quickly reject poor-fit leads?
  • Do you have a concrete feedback loop between Sales and Marketing to minimize the generation of poor-fit leads?

Success and support teams should regularly review the sales team's pre-sales qualification and requirements checklist.

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Land and Expand

In sales, “Land and Expand” is a strategy to land a customer with a small deal, and then sell into the organization to expand your footprint to more seats, additional departments or more products and services.

Land and expand plays out like this in a SaaS:

  1. An individual user signs up for a free trial
  2. Then converts to a paid user
  3. Then you get as many other users in that company as you can
  4. Finally, you convince key decision makers to adopt your product across the organization 

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In the world of software as a service (SaaS), the distance between the Product team and the Customer Success team may appear to stem from competing priorities.

However, a close-up look reveals that the interests of the two teams are very similar.

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Product and CS often fail to work together because of three key issues.

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