Face it. If you run a SaaS or subscription based business, people will leave. Get over it. Find out why.
I find sometimes, people in business will almost go out of their way rather than take in bad feedback. The average person, in wanting to avoid conflict, will sometimes give a pat answer rather than discuss real reasons for stopping doing business with you. No one likes to talk about negatives. No one likes to deal with rejection. So customers vote with their feet, rather than give you constructive feedback as to why they have left.
Its can be really hard to get good information that can turn into actionable answers that you can use to improve your system. Some of my greatest customer experiences have been ones where we worked through major problems. The ones that stay and have a vested interest in you improving the system can give you great feedback. But how do you find out about the bigger, harder to solve issues about the disappointments people might have in getting the best value out of your product, and then leave.
There are a number of different reasons why someone might stop using your product or service. They simply may not need it anymore because something has changed on their side. They may now need something different. The may find a competitive solution that fits their needs at a better price. They may just not know how to get the most out of your service and have have grown frustrated with trying to figure it out. They may not like your business processes.
A lot of companies are now presenting exit surveys when someone ends a subscription to gather information. Or with bigger customers, they will do either a phone or in-person exit interview to gather feedback. Much like the traditional exit-interview HR does with employees that leave the company.
Not putting in place some form of collecting the reasons people leave, and putting actions in place to mitigate identified issues, can foster more churn occurring. There is also an opportunity cost to not being able to maximise the lifetime value from customers – it often costs more to acquire new customers, than to upsell or cross-sell an existing customer base. It can also help you with building out a better picture of a target market, if you identify a difference between people who use the service longer and those that tend to leave.
While the exit-survey or interview is a great tool, it needs to be designed in order to dig deep and get to the truth of why people are leaving. Generic surveys can be good for collecting general information, but to get at the information that can really make a difference you need to go off script and gather real qualitative data, which can be hard to do with generic survey tools.
To get at the heart of reasons, it is good to borrow from the Kaiban method of asking 5 questions in root-cause analysis. The thought her is to get at real reasons, you have to continue asking why even when you possibly have an answer because the real root cause is often quite deeper than the original observations.
Here’s a simple example: Why are you leaving the service? Because we think your monthly fee is too expensive. Why do you think it’s too expensive? Because we think we can do it in house ourselves cheaper. Why is it cheaper to do it in house? Because we can do it with licensed tools we already own. Why is it better for you to use those tools? Because we already know how to use our own tools. Why is this important? Because your tool is too hard to use.
By going deeper into the questions this revealed an issue with training and usage of the product rather than an issue with price. Yet if you had put together a laundry list of options, then the exiting user may have just selected price as the reason for leaving. Hear that enough and you might revised your pricing strategies yet still loose people if the product is hard to use.
It might be harder to engineer how to do this, but one idea is to start with a survey that presents some top level reasons, and then based on the response branch off into a deeper look at the reason. If you also build a way to branch back to another category if you uncover it, then that would be even better. The point is to be doing an investigation into the underlying reasons, not the easy quick answers. You will get to qualitative data that you can really use to help with mitigation tactics to avoid losing other customers.
As well as trying to collect data when people leave the service, leave them with a way to come back at a later date. For example, you may offer to keep the account as-is for six months, and offer an easy path to resuming on the service without having to start again from scratch. You may want to keep them in your sights in terms of marketing, and put them into a special customer segment that gets “come back” messages rather than “sign up” messages. Make onboarding a former customer a different process than onboarding a new customer.
And finally, make ending the business relationship a clear clean process. After all, just because you are no longer doing business together today, doesn’t mean that you won’t be doing business together tomorrow!
