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3 Tips for Managing Churn Rates

3 Tips for Managing Churn Rates

3 Tips for Managing Churn Rates

The entire customer lifecycle is in the hands of the SaaS company, and churn rate reduction is a business building block that needs to be cradled. Jason Lemkin of the SaaS blog told OpenView Labs that if SaaS companies are doing what they're supposed to be doing—creating and selling products customers love—renewals will take care of themselves. If you want low churn rates and long-term, renewing customers, your customers need to love your brand, products and services. Increase customer retention and the security of your customer base by making your customers happy, connecting with them and providing them with solutions they didn't know they needed.


Happy Customer Life Cycle

Happy customers will be your greatest sales team, and referrals will be your most promising leads. Your customers' happiness is contingent on having their expectations successfully met throughout the customer journey.

Signing up for services (the acquisition) should be intuitive and hassle-free. Then the customer should find value in the product and grow to depend on it. If customers aren't doing well, suggests you standardize the interventions. Reach out to your small businesses with automation solutions, and use a personal approach with your higher-end accounts.


Customer Connections

Turn existing, happy customers into loyal, long-term relationships to prevent unpredictable attrition rates. Talk to your customers and be readily available, so you can adapt your services to meet their specific needs.

KISSmetrics provides the following ways to gather customer feedback and foster relationships:

  • Procure accurate customer data and insight with short customer satisfaction surveys; include special discounts or perks as incentives to complete the survey
  • Welcome questions and comments with a product feedback bar or live-chat options
  • Use email to thank your customers for their patronage and to offer help
  • Engage with customers on social media; Facebook and Twitter are casual outlets for interacting with your customers or sharing fun and valuable information

For example, the cloud-based management software vendor Workday (one of the top 10 SaaS companies) manages a proactive Twitter account. Workday uses this space to promote blog posts and network with followers about special events and interesting blog posts.


Marketing & Upselling

Last year NetSuite's legacy software vendors were criticized for letting products slip into "maintenance mode" and adding fewer features. Zach Nelson, CEO of NetSuite, responded that since two years ago, NetSuite actually tripled their number of developers for research and development. Nelson also added that NetSuite's churn rates had never been lower in their history.

Also, companies like QuickBooks that have a large ecosystem of useful add-ons, can promote them in a renewal email, on an online confirmation page, or after a completed order.

Develop new technologies and offer new features to keep satisfied customers on board. Upgrading to a better plan or adding a new feature can help replace high churn rates with high renewal rates. Determine the best type of upselling opportunities by analyzing your customer attributes and behaviors, such as orders placed and customer service support requests.


Customers referred by other customers have a 37% higher retention rate. Schedule time with a consultant to learn how Ambassador can help you increase sales and decrease churn.

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