Dan Martell - February 26, 2018


How To Reduce Your SaaS Churn


Episode Stats


Length

3 minutes

Words per minute

179.58783

Word count

671

Sentence count

30

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 .
00:00:00.120 Hi, I'm Dan Martell, serial entrepreneur, investor,
00:00:02.400 and creator of SaaS Academy.
00:00:04.040 And in this video, I'm going to teach you
00:00:05.320 how to reduce your churn so you can increase
00:00:07.520 your monthly reoccurring revenue growth.
00:00:09.760 And be sure to stay to the end where
00:00:11.280 I tell you how you can get a copy of my Churn Buster 0.98
00:00:14.000 checklist guide.
00:00:30.000 Churn is the Achilles' heel of a SaaS business 1.00
00:00:34.440 and these are the five steps you need to know
00:00:36.380 to reduce the amount of customers canceling on you.
00:00:39.000 Step number one, instrument your metrics.
00:00:42.180 Most SaaS founders have no clue what cohort of customers
00:00:45.820 are actually churning and at what rate.
00:00:47.980 They don't know when they enrolled,
00:00:50.180 they don't know what plan they were registered,
00:00:51.880 they just know as a whole every month they're losing revenue.
00:00:55.100 The first thing you need to do is make sure
00:00:56.860 that you measure those metrics
00:00:58.820 and be able to slice and dice your churn.
00:01:01.580 Step number two, set up a cancellation process.
00:01:04.680 Now, this isn't always a popular recommendation,
00:01:07.180 but in the early days, if you truly don't know
00:01:09.100 why customers are canceling and not using your product
00:01:11.840 is not a great enough reason,
00:01:13.600 then you need to avoid the scenario
00:01:15.900 where customers can auto cancel their subscription.
00:01:18.560 I'm not saying make it hard for them,
00:01:20.660 but I am suggesting maybe they email you
00:01:22.820 so you can at least have that conversation
00:01:24.960 about why, what was missing,
00:01:26.760 how could you make that product better,
00:01:28.220 and over time you take those responses,
00:01:30.620 feed it to the product roadmap,
00:01:32.180 and then instrument maybe some options they can choose
00:01:35.160 when they self-cancel through your product.
00:01:37.880 Three, increase your switching costs.
00:01:40.920 If your product is as easy to switch to
00:01:43.720 as just using another product,
00:01:45.540 then it's gonna make it really hard
00:01:46.900 for you to retain your customers.
00:01:48.120 So you gotta start thinking about features
00:01:50.300 that have your users committed to the product,
00:01:53.620 and that could be from a data entry point of view,
00:01:55.460 it could be from a configuration point of view,
00:01:57.440 It could be from a workflow point of view,
00:01:59.960 but you need to increase the switching costs
00:02:02.440 to your customers.
00:02:03.460 Four, fix payment failures.
00:02:06.920 If you do not have a specific system
00:02:09.800 for understanding how credit card failure payments,
00:02:13.160 or what's called dunning management,
00:02:15.200 is done at your company,
00:02:16.600 then you're gonna wanna look into
00:02:18.100 maybe your credit card provider or services out there
00:02:20.640 that allow you to manage that,
00:02:21.900 but there is opportunity for you to reduce
00:02:23.820 about 30% of those credit card failure payments
00:02:26.860 that go on to be counted as churn in your business.
00:02:30.180 Five, monitor at risk customers.
00:02:33.360 What does a healthy customer look like?
00:02:35.420 What does one that's about to churn look like
00:02:37.800 from a usage point of view?
00:02:39.220 What features have they been deployed?
00:02:42.240 When are they logging in?
00:02:43.360 There's a bunch of different ways
00:02:44.540 you can set up an instrument,
00:02:46.460 the measurement of is a customer happy?
00:02:49.300 So sitting down, setting that up,
00:02:51.360 and then triaging your active users
00:02:53.960 to your customer support team,
00:02:55.120 your customer success is a really important way
00:02:58.240 to reduce your churn in your SaaS business.
00:03:00.620 To quickly recap, one, instrument your metrics.
00:03:03.720 Two, set up a cancellation process.
00:03:06.180 Three, increase your switching costs.
00:03:08.720 Four, fix your payment failures.
00:03:11.120 Five, monitor at-risk customers.
00:03:14.540 As I mentioned at the beginning of this video,
00:03:15.820 I wanna share with you my churn buster checklist guide.
00:03:19.140 The link is below in the description
00:03:20.420 so you can click that and download it
00:03:21.980 and start saving customer cancellations today.
00:03:24.960 If you like this video, be sure to hit the like button below,
00:03:28.140 share it with your friends, and be sure to subscribe.
00:03:31.140 As per usual, I wanna challenge you to live a bigger life
00:03:33.480 and a bigger business, and I'll see you in the next video.
00:03:36.100 All right, let's see if I can do this one even better.
00:03:39.560 You ready?
00:03:40.400 I'm ready, man, for you.
00:03:42.180 This one's gonna be the best.