Last updated on October 14, 2021
Customer disruption, also known as customer attrition, is one of the important factors that can make or break your brand. Over time, customer satisfaction has become a major concern for both small and large brands. In this blog, we will share the factors that affect customer retention and how to reduce customer attrition rate in your SaaS company.
The SaaS business model revolves around three basic elements: Customer acquisition and customer retention, And swelling. Of course, all three aspects of your SaaS business need specific and specific strategies. However, retention is where most SaaS companies get stuck.
Regardless of the size of your company, a customer idle rate of up to 4% can cause a high degree of financial loss. That’s why making efforts to improve customer retention is so important.
Here, we give you proven ways to help your SaaS company reduce customer disruption but first, it is important to understand the distinction between two types of disruption: voluntary And involuntary. We’ll help you tackle both.
Types of customer froth
Your customers can either terminate their subscriptions by choice or involuntarily, but both are considered customer conflicts.
Voluntary customer froth It occurs when a customer consciously chooses to terminate their subscription with your company. Someone may choose to cancel their subscription because your program is no longer suitable for them.
Your services did not live up to their expectations, they switched to a competitor product at a lower price, etc. Regardless of the reason, your customer has decided to stop doing business with you.
Involuntary client churn Occurs when a customer terminates their subscription by accident (they may not even know it has expired!).
On the plus side, your customer has never been unhappy or hoped to stop serving them. However, involuntary disruption still means you lost a customer and profits.
Failed payments are the root cause of involuntary disruption. Failed payments can occur as a result of an expired credit card, incorrect billing information, a card reported lost or stolen, a transaction flagged or blocked by the bank, or insufficient funds. Failed payments make up 50% of total customer lead.
6 Proven Ways to Reduce SaaS Client Fudge
Whether you experience an increase in voluntary or involuntary loss – or maybe both – there are proven ways you can help reduce customer turnover while increasing customer satisfaction and revenue. Here’s how:
01. Collect comments to find out why
One of the main reasons for customer bloating in SaaS models is customer dissatisfaction. In a PWC survey, 32% of respondents said they would stop receiving services from a brand they love after just one bad experience.
You cannot eliminate all of your business weaknesses at once. However, you can take Customer Feedback About what bothers them the most and contributes to the increase in unrest. Focus on collecting feedback and asking direct questions about how to improve.
Algolia, a search and discovery solution, has built an impressive cancel flow. When customers choose to delete their account, this necessarily requires them to put their notes. The delete tab is disabled until then.
Benefiting from the most loyal customers can be another way to gather strong feedback. Asking these important customers what they love about your business and what they think you can improve with a survey will help you target and form long-term, high-value relationships with your subscribers.
Not to mention, those VIP customers will probably feel proud that you care enough to know their experience with your subscription – especially when you offer an incentive to fill out a survey (which you should!).
02. Introduce Trust – Build and Value – Add Items
Reducing scum is not a passive process. Hence, you need to act proactively. To attract subscribers to invest in your services early on, improve customer satisfaction by giving them more value for their money.
Include trust-building and value-adding elements in your services that make them want to continue your services and improve customer relationships at the same time.
And you don’t necessarily need to burn your money and offer promotions. You can offer free tutorials, provide guides or resources, or send personalized video emails.
Gusto, a human resource management software, has offered deferments during the COVID-19 crisis. It added new payment options during COVID-19 which brings convenience to its users. It reflects a sense of empathy and is a positive step towards strengthening relationships with clients.
These methods also bring new customers to your company. 77% of customers Prefer company over friend if they had a great experience.
The value you can add to your subscription will vary depending on your industry, but don’t be afraid to think outside the box and use the feedback that VIP subscribers collect to improve your offerings and increase value.
03. Handling failed payments through human-to-human communication
Did you know that billing failure occurs in 10-12% of credit card transactions?
Unfortunately, all billing issues are very common…and they are bound to happen in your business. But the last thing you want is to lose a happy customer by accident.
That’s why it’s important to communicate with every customer who encounters a failed payment so that you can continue with their subscription.
The process used to communicate with subscribers and collect failed payments is called “Payment Alert.”
Many claimants’ efforts fail somewhat as companies resort to automation and robotics. But collecting failed payments requires empathy and tactful bots will always be lacking. They are not human.
If you are running a small startup business, you may be able to handle emailing each individual customer with a failed payment.
For larger and more complex businesses, you will need to invest in a team-based or third-party solution to effectively handle failed payments through human-to-human communication.
Here are some quick tips for you or your team when it comes to recovering failed payments:
- Think of your customer first and be sympathetic to their billing issues… Billing multipliers can be frustrating and depending on the cause, they are embarrassing.
- Don’t place the blame on the customer. This was not intended! Explain what is happening politely and politely, then clearly outline the next steps.
- Know when to stop. If you message a customer multiple times to charge a failed payment with no response, don’t worry. Count this as a loss. It wouldn’t sound good for your company to question customers about payment.
04. Adopting custom strategies after segmentation
Don’t you adopt different approaches to customers at different stages of the sales funnel? Adopt the same approach once they become your customers.
Don’t get all clients at the same time. A user who’s been with you for years needs different treatment than anyone who joined your service plan two weeks ago. Therefore, divide your customers into groups to target them more effectively.
After segmentation, plan customized strategies for each group. You can set up automated email messages for certain circumstances. According to statistics, personal emails represent a higher level of engagement.
If you offer different programs or features that reflect specific interests or needs, segment accordingly.
If someone is just getting started with your services, provide more information and education than you would with a long-time subscriber.
Once someone becomes a long-time subscriber, offer incentives and rewards, such as free gifts. For example, you can pay Custom All Over Printed Shirts Guide To create your own goods and give them as a reward to your customers who have purchased goods or services for a certain amount of money..
Such customized strategies lead to better communication and, consequently, a lower rate of customer churn.
05. Reach out to vulnerable customers
Voluntary disturbance usually does not occur out of nowhere. It’s a decision that takes time. This is good for you as a business owner because it means that you have time to influence the customer’s decision the other way and convince them to stay.
Key indicators of potential disruption include reduced service use or complete cessation of use. That’s why it’s important to monitor these metrics.
If a subscriber seems to have lost a major feature of your subscription, send an email and show them how to maximize their service.
If someone stops using completely, don’t be afraid to reach out via email as well. Ask them why! Ask them if they need help using any of the features you offer.
06. improve customer service
96% of customers say customer service is a major factor in brand loyalty.
Contacting our customer service team should be very easy – be it through email, chat box or phone.
You want to be available to resolve any customer questions and concerns as they arise. By making yourself and your team available, you are effectively building trust and loyalty to your brand.
Nothing sounds more fishy than a company you can’t have when you have a problem.
Being available is only the first step towards doing good Customer service. Communication with clients should be prompt, efficient, courteous and helpful.
Even just one bad experience with a rude or unhelpful customer service representative can kill a brand’s reputation.
According to research, you can prevent 67% of disruptions if customer complaints and problems are resolved correctly the first time.
Customer churn is inevitable. Every SaaS company experiences it. The goal is not to let customers get out of hand and implement as many effective customer retention methods as possible. Implement these strategies, monitor results, implement changes, and prevent users from walking away from your SaaS company.
Remember, it is an ongoing process. If you cannot implement consistent efforts, you have the option to seek support from customer retention services and recover failed payments.
gravy solutions, a payment recovery company, designed to recover lost revenue from failed payments and reduce customer stress in SaaS models.