Dan Martell - February 26, 2018


How To Reduce Your SaaS Churn

Topics
reduce churn in SaaS business
Hosted by
Dan Martell
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Episode Stats


Length

3 minutes

Words per minute

179.59

Word count

671

Sentence count

36

Harmful content

Hate speech

2

sentences flagged


Summary

Summaries generated with gmurro/bart-large-finetuned-filtered-spotify-podcast-summ .

Churn is the Achilles' heel of a SaaS business, and these are the 5 steps you need to know to reduce the amount of customers canceling on you. 1. Instrument your metrics. 2. Set up a cancellation process. 3. Increase your switching costs. 4. Fix your payment failures. 5. Monitor at-risk customers.

Transcript

Transcript generated with Whisper (turbo).
Hate speech classifications generated with facebook/roberta-hate-speech-dynabench-r4-target .
Topics generated with Qwen2.5-3B-Instruct.
Hosts, guests, and mentioned names generated with spaCy (en_core_web_sm), reconciled against Wikidata.
00:00:00 Hi, I'm Dan Martell, serial entrepreneur, investor,
00:00:02 and creator of SaaS Academy.
00:00:04 And in this video, I'm going to teach you
00:00:05 how to reduce your churn so you can increase
00:00:07 your monthly reoccurring revenue growth.
00:00:09 And be sure to stay to the end where
00:00:11 I tell you how you can get a copy of my Churn Buster 0.98
00:00:14 checklist guide.
00:00:30 Churn is the Achilles' heel of a SaaS business 1.00
00:00:34 and these are the five steps you need to know
00:00:36 to reduce the amount of customers canceling on you.
00:00:39 Step number one, instrument your metrics.
00:00:42 Most SaaS founders have no clue what cohort of customers
00:00:45 are actually churning and at what rate.
00:00:47 They don't know when they enrolled,
00:00:50 they don't know what plan they were registered,
00:00:51 they just know as a whole every month they're losing revenue.
00:00:55 The first thing you need to do is make sure
00:00:56 that you measure those metrics
00:00:58 and be able to slice and dice your churn.
00:01:01 Step number two, set up a cancellation process.
00:01:04 Now, this isn't always a popular recommendation,
00:01:07 but in the early days, if you truly don't know
00:01:09 why customers are canceling and not using your product
00:01:11 is not a great enough reason,
00:01:13 then you need to avoid the scenario
00:01:15 where customers can auto cancel their subscription.
00:01:18 I'm not saying make it hard for them,
00:01:20 but I am suggesting maybe they email you
00:01:22 so you can at least have that conversation
00:01:24 about why, what was missing,
00:01:26 how could you make that product better,
00:01:28 and over time you take those responses,
00:01:30 feed it to the product roadmap,
00:01:32 and then instrument maybe some options they can choose
00:01:35 when they self-cancel through your product.
00:01:37 Three, increase your switching costs.
00:01:40 If your product is as easy to switch to
00:01:43 as just using another product,
00:01:45 then it's gonna make it really hard
00:01:46 for you to retain your customers.
00:01:48 So you gotta start thinking about features
00:01:50 that have your users committed to the product,
00:01:53 and that could be from a data entry point of view,
00:01:55 it could be from a configuration point of view,
00:01:57 It could be from a workflow point of view,
00:01:59 but you need to increase the switching costs
00:02:02 to your customers.
00:02:03 Four, fix payment failures.
00:02:06 If you do not have a specific system
00:02:09 for understanding how credit card failure payments,
00:02:13 or what's called dunning management,
00:02:15 is done at your company,
00:02:16 then you're gonna wanna look into
00:02:18 maybe your credit card provider or services out there
00:02:20 that allow you to manage that,
00:02:21 but there is opportunity for you to reduce
00:02:23 about 30% of those credit card failure payments
00:02:26 that go on to be counted as churn in your business.
00:02:30 Five, monitor at risk customers.
00:02:33 What does a healthy customer look like?
00:02:35 What does one that's about to churn look like
00:02:37 from a usage point of view?
00:02:39 What features have they been deployed?
00:02:42 When are they logging in?
00:02:43 There's a bunch of different ways
00:02:44 you can set up an instrument,
00:02:46 the measurement of is a customer happy?
00:02:49 So sitting down, setting that up,
00:02:51 and then triaging your active users
00:02:53 to your customer support team,
00:02:55 your customer success is a really important way
00:02:58 to reduce your churn in your SaaS business.
00:03:00 To quickly recap, one, instrument your metrics.
00:03:03 Two, set up a cancellation process.
00:03:06 Three, increase your switching costs.
00:03:08 Four, fix your payment failures.
00:03:11 Five, monitor at-risk customers.
00:03:14 As I mentioned at the beginning of this video,
00:03:15 I wanna share with you my churn buster checklist guide.
00:03:19 The link is below in the description
00:03:20 so you can click that and download it
00:03:21 and start saving customer cancellations today.
00:03:24 If you like this video, be sure to hit the like button below,
00:03:28 share it with your friends, and be sure to subscribe.
00:03:31 As per usual, I wanna challenge you to live a bigger life
00:03:33 and a bigger business, and I'll see you in the next video.
00:03:36 All right, let's see if I can do this one even better.
00:03:39 You ready?
00:03:40 I'm ready, man, for you.
00:03:42 This one's gonna be the best.