The most common causes of customer churn and how to fix them

Churn is a key KPI for any SaaS company. High churn eats into recurring revenue and churn above 5% shakes a company to its core. Especially in the current economic situation, where companies are questioning their software budgets and contracts are being cancelled, containing churn becomes even more important.

This is not the only reason why every SaaS company should look at churn in detail. Churn is also a good indicator of how well an organization really understands its customers, how transparently customer information is shared internally, and how well an organization responds to customer needs. Keeping churn low is not just the responsibility of sales or customer success teams, but affects just about every department: from product to professional services to support.

In this blog post, we'll go over the most common reasons for churn and describe how churn can be prevented.


The most common reasons for churn

Over the last few months, we conducted a study with over 150 Customer Success Team Leaders. In our conversations, we were able to uncover several particularly influential trends.
As a rule of thumb, churn doesn't have just one reason. Rather, it's a combination of different issues that end up driving a customer to not renew or cancel their contract.


Poor customer fit

Problems often start very early in the customer relationship. Customers have clear expectations or problems which they would like to address by using a new product. It is essential to understand exactly these expectations and problems in detail in order to lead only really suitable customers further through the sales process to the conclusion of a contract. Often enough, however, the long-term costs associated with servicing and supporting an ill-fitting customer are accepted in order to celebrate short-term success. A good qualification process with open, honest questions and focus on customer needs is essential.


Missed customer expectations

The direct consequences of poor customer fit are usually failed customer expectations. In sales, everything is done to get customers to sign the contract. Often promises are made, e.g. about future product developments, to win the deal. To a certain extent, this is also important and intended. However, sometimes too much is promised, which leads to unfulfillable customer expectations. These are disappointed at the latest when the customer encounters the actual product.
The first few weeks - usually the onboarding - are then crucial to managing customer expectations. The customer bought the product for a reason. It is essential that all teams in the company know what that reason is in order to generate the expected value for the customer as quickly as possible.


Suboptimal handover from Sales to Customer Success

But often, even customer success managers don't know what exactly their sales colleagues have promised and are busy managing their customers' disappointed expectations.
A deep understanding of needs, problems and expectations is critical - across departments. This is the only way to successfully serve the customer throughout the entire customer lifecycle. One of the most critical points in the Customer Lifecycle is the handover from Sales to Customer Success. A bad experience for the customer during handover and onboarding is extremely difficult to recover from.

According to a survey we conducted as part of the aforementioned study, more than 50% of Customer Success leaders are dissatisfied or very dissatisfied with the quantity and quality of information their teams receive from Sales. A good data basis is essential, especially during handover.


Poor product experience and bugs

As a product-driven company, it is always important to prioritize between strategic product development, integrating product feedback and fixing bugs.
From our own experience, we know that customers are quick to forgive bugs as long as they are fixed directly. But often customers feel like they are talking to a wall - product feedback is shared and bugs are complained about, but nothing happens. Faulty products and a slow response to customer needs quickly lead to very unhappy customers


Competitors

Many software companies are increasing their efforts around good buyer enablement and even B2B products can easily be tried out on their own via the competitors' websites. Especially in highly competitive markets like SaaS, it is important to always have the competition on the radar and to understand exactly how and why customers decide for or against the competition. However, knowledge about direct competitors is often not captured at all, gets lost and has to be built up first through extensive market research.
A popular workaround are extensive Excel spreadsheets in which customer-facing teams have to document information about competitors at regular intervals. If this documentation takes place at all, the collected information is synthesized in time-consuming manual work to create battlecards, marketing materials and the like. Often, information is not collected at all, and instead of using valuable existing knowledge, time-consuming research is done.


How bliro helps reduce churn

Bliro addresses all the above-mentioned causes of customer churn and also minimizes the "cost to serve" - an important KPI, especially for fast-growing companies, to ensure that many customers are served as well as possible with limited resources. How exactly does bliro achieve the impact mentioned above?


Better customer qualification with templates and predefined structures

Bliro supports SDRs, BDRs and Account Executives with meeting templates and structures for good discovery meetings. Whether MEDDIC, BANT or any other sales framework - any structure can be mapped in bliro. With the ability to specifically record and share highlights of conversations, bliro also allows leads to be passed between different sales teams with all relevant information. Without individual users spending hours filling in Salesforce fields and writing handover messages.


Better handoffs between Sales and Customer Success with automated meeting summaries

An extremely critical moment in the customer journey is the handover from Sales to Customer Success: Are all the customer's expectations being met? Does Customer Success understand the most important use cases? Are all teams always up to date?

Bliro simplifies these handovers with automatic meeting summaries. Without significant additional effort, sales reps can create automatic summaries of key customer meetings for their Customer Success colleagues - from use case descriptions and product requirements to the exact words and emotions of the customer.


Better virtual customer appointments thanks to less multitasking and stronger customer focus

More and more customers prefer asynchronous communication via chat or online stores (yes, even in B2B). Accordingly, every minute that can be spent with the customer is worth its weight in gold. And instead of having to multi-task between writing notes, leading the conversation and presenting slidedecks in meetings, bliro's users can fully focus on their customer while bliro supports them live in the meeting and automatically documents all relevant information. Different stakeholders can be updated directly after the meeting with the information that is important to them, directly in the tools that they are already using.

The reliable documentation of customer meetings, including all relevant insights, also opens up new analysis and optimization possibilities for the organization itself: Is my team spending enough time with high-revenue customers? What kind of customer feedback is shared in the meeting? Is this a healthy customer or will they churn soon?


Optimization of processes in customer-facing teams

Reliable documentation of customer conversations, including all relevant insights and metadata, also opens up new analysis and optimization opportunities for the organization itself: Is my team spending enough time with high-revenue customers? What topics are discussed in customer meetings? Does the customer give a lot of active product feedback or do they complain about the same problems over and over again? Is this a healthy customer or will they churn soon? Bliro translates the qualitative information from the meeting into facts and figures that can then be incorporated into internal reporting processes to make decisions and optimize processes based on an unprecedented data basis.


Focused product development through closer collaboration between customer-facing and product teams

Often there is no objective data basis of qualitative customer feedback in the B2B area. Customer feedback is shared with the product team in an unstructured way and it is often unclear what impact customer feedback has on the product roadmap.

Bliro builds a direct bridge from customer conversations to the product team. Not only that, but sales reps and customer success managers can share the exact words of the customer with bliro so that no important information is lost and product teams can understand in detail the problems and requirements of their customers.

Improved information about the closest competitors

Bliro reduces the effort for classic market research and helps its customers to focus on the market that is really important. Namely, their own customers and direct competitors. Customers talk about the experiences they have had with a competitor? About how much better their customer support is, how much more comprehensive their product is?

With bliro, sales managers, marketing teams and competitive analysts can create analysis and material about all the really important competitive insights directly from customer meetings. So that customer-facing teams always know exactly how to adjust their offer or how to counter the next competitive objection to outmaneuver the competition and win the deal.


You want to learn more?

Want to learn how bliro helps you increase sales and reduce churn and costs to serve? Book a half-hour coffee chat via Calendly to speak directly with one of bliro's founders and enjoy a live demo!