A SaaS subscription model is based on retaining customers, yet surprisingly very few businesses actively pursue retention, choosing to invest at the top end of the funnel on customer acquistion.This may be linked to the worrying statistic that 60% of subscription businesses didn’t know how much revenue they lost to churned customers in 2017.
Neglecting this aspect of a subscription business can result in a large decrease in customer loyalty, with 1 in 5 customers cancelling their subscription in the first year. This ultimately diminishes your customers’ average lifetime value.
In the subscription industry, economic growth is dependent on two core aspects: retention and churn. Your business will likely have trouble experiencing growth if you’re not able to retain the customers you already have. Since subscription KPI’s rely heavily on this metric, it’s about time businesses invest in reliable software and data analysis tools to help with this. Tools specifically built to help with Customer Success and churn analysis will provide the structure and insight to enable your teams to better understand customer behaviour, which will undoubtedly help decrease customer churn rates and give your customers an overall better experience that can contribute to your businesses growth over time.
In recent years, popular subscription services have begun to rely heavily on customer retention software to get (and stay) ahead in the game and have been able to maintain very low churn rates as a result. Examples of this can be seen within the subscription models of Netflix and Spotify who have kept their churn rates below the industry average for years and more so in the past 2 years. Even when Netflix increased its subscription rates for the first time in 3 years in 2017, its customer retention rate remained high.
With that in mind, for your retention strategy to be truly effective, you need to be making use of the data available to your subscription company. The insights surfaced by Churnly’s customer retention software is incredibly powerful. Effective customer retention software can show exactly why a customer churns and allows business owners to create methods to prevent other customers from doing the same.
A business doesn’t need a large number of churning customers to be able to determine the best actions to be taken to retain their customers. In fact, customer retention software can give accurate information towards which customers are likely to leave based on their behavioural patterns alone. Churnly’s software is able to do this with great accuracy using artificial intelligence to show Customer Success teams exactly what can be done to prevent churn. To the naked eye these patterns are impossible to recognize, but Churnly’s machine learning ensures its customer retention software can provides insights and predicts to help maintain your current customer base.
Besides the obvious benefit that customer retention can have on your businesses revenues, another less direct result of customer retention software is the improved experience of your customers within your product that indirectly results in growth.
Get a demo of Churnly today and put the power of your data and Churnly’s software to work, giving you actionable insights to keep revenue and customers in your business.