One of the most important metrics I look at it in my SaaS business is Churn (the number of months a customer stays until they cancel). For example if you get 50 new customers but also 50 customers cancel, you don’t grow. This is something all SaaS companies deal with. The first 6 months they think they are growing like crazy, but then the customers that signed up in month #1 start to cancel. So, on Month #7 your growth starts to decline.
Top 5 reasons people cancel on a SaaS product:
1. Product doesn’t work
Not Save-able You can’t save customers on your cancellation flow if you product doesn’t work for them.
2. Customer goes out of business
Not Save-able Unfortunately you can’t control this.
3. Switching to competitor
Maybe Save-able If they are already on your cancellation screen, this means they are already signed up with your competitor. You can’t really save them at this point. Try to be more competitive earlier on in the customer life cycle.
4. One Time Use
Save-able! Sometimes the customer just needs your product for a one-off project.
5. Price is High
Save-able! Offer the customer a low priced option.
This blog post is about how to save the customers that are canceling for reason #4 and #5.
Citrix is a leader in SaaS and they have figured how to keep their Churn low.
To start off with you can’t really “Cancel” your GoToMeeting account. But, you can “Turn Off Renewal”, this allows you to easily jump back and start paying again even after you have cancelled. This is pretty smart, because some months their customer might not need their software and this gives them the option to easily turn on their service again at a later time.
How GoToMeeting addresses the “Price is High” cancellation
They wanted to make sure if you were canceling because of price you don’t leave, after you click “Turn Off Renewal” in the screen shot above, you are taken to a confirmation screen where you see the ability to bump your package down to a low price option:
They try to sell me again on the lower price option. This time with more force in case I missed it the first time. They added some testimonials and logos you trust. They also use the word “discounted” under the Yes! button, making it seem like you are getting a deal.
Churn will kill your business. Citrix brilliantly executes their cancellation flow. I also believe their $19/mo plan is specifically designed to make sure people are not switching over to their competitor join.me which is also priced at $19/mo (thus they are trying to also address the “Switching to Competitor” reason).