Why do customers leave? A look at Saas churn
It is said that for SaaS businesses, it is 6 times more difficult to gain a new customer than to retain an existing one. These companies recognize that customer retention is paramount to their ability to stay relevant and even thrive. But what’s the magic formula that retains customers and prevent churn in SaaS companies?
There are always going to be problems with new releases of software, issues with implementations, and even overlooked customer concerns. The most critical determinant of your customer’s satisfaction and even their decision to stay or go, will always be in how your people interact with them when things go wrong. Only this can tip the balance in your favor and retain that customer.
Leaders think about and are challenged by perfecting the client experience to prevent churn. They almost always associate success in this area with hiring and training the right people and providing copious amounts of product knowledge and customer service training. But this is only part of the winning formula.
Spend a couple of years sitting right across from the client success team in a SaaS company and you begin to notice the attributes of the most successful agents. Those that are making the difference are ones that have a strong sense of purpose along with a formidable work ethic.
Those individuals are engaged in fighting for your success every day. Let’s be very clear, these people don’t say they are engaged, they are genuinely engaged and find meaning in trying their best to make your business more successful.
Unless your people are prepared and willing fight the good fight and wow customers in their daily interactions, those customers are not going to feel your love, no matter how much product knowledge and client success training you provide.
People with this sense of purpose are the bloodline and conduits of empathy. They make your clients feel appreciated and yes... loved. These high purpose people can smooth almost any issue because they are able to make your customer feel that they are well cared for.
Dr. Tim Baker, thought leader, consultant and author, wrote in 2018 about the Characteristics of high performing teams. He sighted a sense of purpose as a fundamental attribute of a high performer.
Individuals with a sense of purpose have the motivation that drives them toward a satisfying future. And a satisfying future inevitably includes doing good work every day.
So why aren’t hiring managers interviewing for “a sense of purpose” when hiring? In the SaaS space, this should be an important element of a broader people strategy.
When leaders begin to look at their employees in a more holistic way, they will realize how important it is to have the right people strategy to promote the amazing behaviors and attitudes that can catapult their business towards greater success and profitability.
Ana Alfonso Pagliery, CEO/Board Executive
Helping clients buy, sell, separate, integrate, reshape, restructure or rethink their businesses, while achieving financial success. M&A | Investment | Partnerships