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Transcript

Hey there. What I want to talk to about today are 5 steps to reduce churn by upwards of 20 percent. Now when you go over there and you research and you try to figure out what a good churn rate is for your business in the SaaS industry, you’re going to come across this number of 5 percent. 5 percent month over month churn isn’t average. It’s an average, been averaged out thousand of SaaS, but it is not okay. A 5 percent churn rate over the course of a year basically means, you’re going to loose half of your customer base. It’s 46 percent churn over the year. So imagine you bring in 2 million dollars annually recurring revenue. Over the course of the next 12 months, you’re going to loose 46 percent of that. That means you’re going to have to work twice as hard over the course of a year to double your revenue. It just doesn’t make sense.

Here’s a few steps you can take to reduce your churn by over 20 percent. Open the feedback blast doors. In app poll messages for behavioral feedback through tools like Qualaroo or Hotjar, basically give you a one on one connection with your customer, where they can give you feedback on specific aspects of your application. You don’t want to just go out there and say, ‘Hey, what do you like, what don’t you like?’. You want to go out there and say, ‘Hey, we have this new feature that we rolled out, what are your thoughts on it?’. Or, “You’ve tried to take this action with this feature, what did you think? Did you like the feature? Was it missing something? Is is something that you could live without, or something that you wouldn’t be able to live without?”, and that’s why you pay for the software. You want to ask very specific questions that are going to give you the right feedback you need to make iterations and focus on what the product road map has to be over the coming 12 months.

Talk to your best customers, talk to your worst customers and talk to the most angry customers you have. Any of the people who are either power users or they absolutely hate your product, and they tell you it up front, those are great people to talk to because they will give you feedback about what they hated or what they liked so much that they’re sticking around, or they’re leaving instantly. Take that feedback, condense it and figure out what the next steps you have to take are, in order to improve. So if your power users say, we love this one feature, but it’s missing this, take that seriously. One power user is easily the equivalent of 10 to 20 normal users who may turn in the next 6 months. A power user will stick with you until you really wrong them. A user whose churned and is angry, they’re also great, because they’ve done their research and that’s the reason why they’ve found that your product has an issue. They’re out there looking at the competitors in the market, and they’ve made an informed decision to not go with you because of an experience they they’ve had. You want to listen to those people and take their criticism seriously. It can very well lead to a much better product in the coming months.

Ask for negative feedback more than positive feedback. I’m not saying go out there and ask people to tell you that your product sucks, ask them for constructive criticism. Focusing on the positive is great, but it’s only going to lead you into a false illusion where you think your product is perfect. No product is perfect. You need to go out there and get people to tell you the real thoughts and opinions on what they think about your product and what can be improved for their use case. Make that feedback super accessible. Make your feedback loops accessible. Don’t hide your feedback buttons in the bottom of a knowledge base somewhere, make it in your face enough that someone who is reasonably in depth into the product will be able to find it and give you that feedback that you’ll need to iterate on your product.

Map out your customers journey. Every customer that you have will have their own journey that they take within your product and they’ll all have barriers that they hit along the way. You can track all of this through a tool like Mixpanel or Kiss Metrics, but what you want to do is be able to say, “Our power users take all of these actions, but here’s the feature that they don’t touch. And all the users who’ve churned, take all of these actions, but here’s where they got stuck, and here’s where they dropped.” The reason why you want to map this out is, you’re going to be able to find gaps in the path where people are either not using features that you have, and you know there’s the opportunity to cut that feature entirely, or you’re going to figure out the places where the customers who are churning are getting frustrated and leaving your product for a competitor. So what you want to do is you want to map this out, and make sure that it’s known company wide, this is the current customer journey, so that the product team and your developers know exactly where to go in and improve and what not to focus on, because customers just aren’t using it.

Hold your customers hand. On board them in such a way that they are as much of an expert on your product as you are. If they don’t know how to use something within your product, they’re going to search for support and feedback, but those who are less tech savvy will just churn. That’s what you want to avoid. Empower every user to become a power user. On board them with emails, in app messages, maybe even support calls, anything you need to do to get them to the point where they know your product as in and out as you do. Give them access to ask questions and push the limits of your product. 2 great examples of this are click funnels and lead pages. Both of the have tons and tons of videos around how to use their product, and click funnels even have a forced video set that they make you watch before you can even touch their product. Even after you’ve paid for it.

Ask for a favor. Don’t let users churn without asking them questions. Typically this is called a cancellation survey. Basically circle back with the users that churned, or capture them right at the point where they churn and ask them questions. Ask them why they canceled. Ask them what you can do to improve the product or improve the user experience so that they don’t cancel, or so that they can come back in 6 to 12 months. If you build it they will stay. Ask your target customers what could be improved about the product that will make them want to stay that much longer. Don’t get feedback from all of your users, just the ones who are the ideal customer demographic, where the use case of what you’ve built, fits with what they’re doing. Do focus sessions with these users in order to get one to one feedback and learn about those use cases. Some of those use cases are probably things your team has never even thought of, and it can be a very profitable way to go. Understand these use cases and understand the value that each use case brings. The value of people’s time varies based on the way that they use it, and based on the way that they get a result. So if they’re using your product for something casual and hobby related, that’s a very low value activity, whereas someone whose using your product and it’s vital to the processes within their business, that’s a super high value activity that they are going to put an extreme value on. I’ve had several of these focus sessions with inst the page and lead pages where they ask me exactly what my use cases are in order to identify what the value of the product to me is. And because of that ability for me to express my thoughts and opinions about the product and about how it should be used, I’m a loyal customer with companies. I have a 5 year subscription on both, just because they’ve take the time for 15 minutes to hear about how I’m using the product in order to improve my customer experience.

Now what’s an acceptable churn? Now we’ve talked about how to reduce churn, here’s what an acceptable churn is in order to grow your business rapidly. In the enterprise realm, selling 4 or 5, even 6 figure per month deals, less than 1 percent is the only way to go when you’re dealing with those small markets. If you have a churn rate above 1 percent per month, you’re burning many many bridges within your market that over the next 5 to 10 years you’ll never get back. In the small to medium business SaaS space, where you’re dealing with a really large market of small to medium businesses, at 2 to 3 figures per month as a recurring revenue stream, 3 to 5 percent is an average churn rate, but less than 3 percent is what’s acceptable. What you want to do is ensure that you’re not burning your entire market over the next 10 to 20 years as you grow your business, so you want to keep that churn rate as low as humanly possible. You can read and watch more of this awesome content on our blog, www.easyautomatedsales.com. I appreciate you taking the time to watch it and looking forward to speaking to you again soon.[/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]