5 Ways SaaS Businesses can Reduce Churn

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5 Ways SaaS Businesses can Reduce Churn

If you run a SaaS company, you know that customer churn is pretty much inevitable, similar to abandoned carts being inevitable in the world of ecommerce. However, just like you can work to reduce abandoned carts, you can also work to reduce customer churn.

Your first question is probably: What is an acceptable churn rate? We knew you’d ask. It’s a logical question to ask, but not always an easy one to answer. There are plenty of variables at play that impact churn- including your company size and specific industry. Numerous studies have been conducted, and for SaaS companies targeting small businesses, an average acceptable monthly churn rate is between 3 and 5%.

If you calculate your monthly churn rate and your percentage is significantly higher than that, that is alright. There are plenty of things you can do to start bringing that percentage down. Even if you are falling in the 3-5% range, there’s always room for improvement! No matter what your current churn rate is, you can set a goal to reduce it. Today we’ll be discussing how to do just that.

Check out these 5 ways SaaS businesses can reduce churn. Make sure you record what your current churn rate is before giving these tips a try. Check in periodically and see what happens once you get started. You should slowly but surely see your churn rate start to fall.

1. Offer a free trial
One of the best areas to focus on when reducing customer churn is the beginning before you’ve secured someone as a customer. While they are just a lead, a great way to both qualify the lead and get them invested in your service is by offering a free trial.

The truth is, not everyone is a good fit for your service. That’s okay. A free trial can help weed out leads that ultimately aren’t the right fit. For those who are the right fit, a free trial is a great low risk way for them to try out your service.

free trial Ways SaaS Businesses can Reduce Churn
Image credit(s): Sixteen Ventures


Once someone has used your service, it’ll be a lot harder for them to walk away from it. While convincing sales copy and an optimized landing page can do a lot, nothing will work better than the service itself. Don’t have your leads take your word for it that you have a great service- let them see for themselves.

As for the length of time that your free trial should be, consider doing what Salesforce did and segment your free trials based on the service level. This is great if you offer different services- more basic services require less time, while el salvador telemarketing data more advanced tools likely need more. If you have a very complex service, 7 days is likely not enough time to convince someone that they need your tool. Instead, offer something longer so that they really have the time to see the value.

In addition to the free trial, make sure that you are engaging with the lead at this point to ask them how they are liking the product. You may offer them some tips at this point, or even a small discount to encourage them to stick with you after the trial.

2. Collect feedback (and listen to it!)
If a lead decides to not stick with you after their free trial, or if a customer stops their subscription with you, what you need to do immediately is ask for feedback. You may not be able to get this particular lead or customer back, but you can learn from them. More importantly, you can use that valuable information to help secure current and future customers.

collect feedback Ways SaaS Businesses can Reduce Churn
Image credit(s): Neil Patel


Be sure to personalize your request for feedback in order to increase your chances that someone will actually respond. Act like you care- because you do (or you should!) Notice the copy that Groove used in their feedback request email. Not only do they use the person’s first name, they make the customer feel better by saying that there are no hard feelings. This tactic certainly worked for Groove- they were able to reduce their churn rate by over 70%!

As you collect feedback from customers, make sure you watch out for patterns and see where you need to improve. This is especially important if you are a new SaaS company. Perhaps you are targeting the completely wrong audience, or maybe you have a few glitches that really need to be worked out. Maybe you don’t offer quick enough support. You won’t know unless you ask.