Stopping at-risk customers from cutting ties with your company takes more than just tracking churn metrics.

Sure, studying the right metrics shows you how effective your customer retention strategy is. But to reduce churn itself, you should focus on:

• Understanding customers’ in-app behavior to inform product development
• Building relationships with at-risk and loyal customers to multiply the value you provide 
• Offering an unparalleled customer experience with your product and team at each step 

All this ensures your SaaS tool becomes an integral part of users’ workflows, preventing them from churning.  

The question now is: what relationship-building tactics can you use to increase customer satisfaction and reduce churn? To find out, we sat down with Corrina Owens, Chief Evangelist Officer, purple cork. Here’s what she had to say. 

What is churn in B2B SaaS?

Churn in B2B SaaS is made up of paying users who choose not to renew their subscription for your product or service within a defined time frame. 

For example, when a customer with a yearly contract decides not to sign a new one once the initial twelve months are up. 

Keep in mind though: your churn rate doesn’t include the number of customers who downgrade or update to a different package (those go under net revenue retention). Instead, it focuses on existing customers who unsubscribe within a specific time period, translating to revenue loss.

Realistically, every business experiences churn. But a high churn rate can be an indication of a bigger problem. Like your sales team isn’t closing customers who are the right fit for your SaaS product, pointing to an issue with pipeline generation. And, left unaddressed, high churn rates impact your long-term customer retention, revenue, and reputation, as well as increase pipeline anxiety. 

Cutting down churn risk not only supports your sales team and bottom line but your customers as well. That’s why it’s so important to understand why they’re churning and what you can do to keep them around longer.

3 reasons customers churn

With all its cost-cutting, the current economic downturn is a leading reason behind customer churn. But it’s not the only one. From poor customer experience to inadequate product education, there are several reasons that prompt users to leave. 

1. At-risk customers no longer find your product valuable

Customers stop seeing value in a product when they either don’t use it effectively or when they only use it to solve one or two of specific problems.

This often happens when products evolve over time, but customers aren’t educated about the new ways they could use your tool.

What’s more, if your original point of contact leaves the company and their replacement isn’t as familiar with your product or service, they might end up using it inconsistently — failing to realize your product’s true potential. 

2. Customers can’t explain your tool’s value to their executives

When you don’t communicate about your product’s value enough, even paying customers may not be able to explain how beneficial your tool is to the people who are in charge of the budget.

Chances are, they might even start thinking competing tools are better than yours.

3. You’re bringing in the wrong users

Closing accounts that don’t align well with your ideal customer profile (ICP) increases churn risk because sooner or later, the customer realizes your tool isn’t driving business outcomes for them.

The root of this problem? Your sales reps don’t understand who the ideal buyer is or they only have a superficial understanding of their target user’s pain points and goals.

Revisiting and optimizing your sales enablement process is one solution to this. Equally important here is arming reps with powerful B2B prospecting tools to target and close the right customers — more on this below.

8 ways to prevent churn

Churn reduction boils down to the experience customers have with your product and customer success team. For example, if they repeatedly encounter bugs in your tool and receive poor responses to their feedback, they won’t hesitate to find an alternative.

The solution then is to improve their experience by:

• Proactively sourcing customer feedback to create a product users love
• Building relationships with customers to double the value you offer

But that’s easier said than done. Start building a churn prevention plan by following these practical tips from Corrina. 

1. Multiply the value you offer customers

The first step to reduce churn is to identify at-risk accounts and the people in those organizations that find the most value in your tool.

“Not just who was the signer initially [was] because that person may not even be there anymore, but who are the other champions that maybe are individual contributors that you didn't care about initially,” explains Corrina Owens.

As you do so, reach out to the champions to learn about their goals and struggles. “Maybe they’re up for promotion or maybe they’re doing multiple jobs and now they’re owning outbound sales reps and they’re owning like a portion of a marketing function,” adds Corrina.

Another idea is to offer value engineering exercises that review and compare at-risk customers’ data with loyal customer data to unearth ways they could use your tool.

Corrina explains:

 The aim here is simple: understand the struggles champions are dealing with so you can find ways to solve those problems with your product.

2. Talk to loyal customers 

Reach out to your loyal customer base to ask them two simple questions: 

• Why did they buy your product?
• How are they using it?

Doing so will give you a list of unique ways existing customers are using your tool. The answers will also give you a refresher about the value your product offers — growing your social-proof-backed arsenal to educate customers at risk of churn. 

As Corrina notes, “It’s just so important to […] find out [and simplify] what is that valuable thing that you are delivering to your client and then deliver it day in and day out. I mean, if you’re not talking to your customers multiple times a week, your company’s doing something wrong.”

3. Make it easy for your customers to pitch your product to executives

“Companies need to make sure they have a narrative to help their customers pitch to their executive team, why their tool is the tool to use and why the other [competing] one doesn’t even stand a chance,” says Corrina.

This is particularly important lately as CFOs tasked with cutting budgets question the value and need of different software in their business toolkit.

In such circumstances, your customers should be able to explain your tool’s value proposition — why it’s irreplaceable and why a competing tool doesn’t cut it. 

However, that can only happen when you:

• Know your tool’s value proposition yourself 

Regularly talking to your best customers helps you nail your value proposition. 

• Continue educating current customers about your product’s value throughout the customer journey

This way, your product’s unique sell proposition will remain front and center in your customers’ minds. 

 4. Adapt your product to boost customer experience

Consistently source customer feedback to:

• Resolve product bugs and weaknesses
• Better guarantee customer success by adding in-demand features 

Not only does this let customers benefit more from your product but it also improves your net promoter score (NPS) as users realize you value their feedback and make improvements accordingly. 

5. Review first-party data to understand product usage in real-time

Regularly review your product and marketing data to learn how customers are using your tool — including what they’re struggling with.

Use the data to inform not just product development but also customer education and your retention and marketing strategies. 

6. Focus on building peer-to-peer relationships with customers

Customer engagement is essential not only with your point of contact and the C-suite at a paying account but people throughout the organization.

Corrina calls this “peer-to-peer matching” which aims to strengthen relationships with customers and retain them — even get you information on how they’re using your tool or how things are changing in their organization. It’s also beneficial for recognizing any churn intent well ahead of time.

However, it’s important an ABM marketer takes responsibility for the peer-to-peer relationship-building program so customer support members know who to reach out to and engage with (including what intel they need to mine) to maintain the relationship.

Asking for users’ feedback is another effective way to improve customer relationships. Corrina shares:

7. Target the warmest leads to bring in best-fit customers

Converting new customers who are the best fit for your tool is key to increasing customer retention.

Pipeline generation tools, like UserGems, assist with this in particular. It tracks buyer job changes, automatically identifying alumni customers (folks who have experience using your tool in a previous role and hopefully loved it) when they join new organizations.

By reaching out to these alumni users, reps can close best-fit deals, reducing the odds of churn. In fact, targeting and converting previous champions reduces the length of sales cycles by 12% while doubling win rates. As a result, you can both increase customer lifetime value as well as boost sales rep productivity.

8. Source feedback from churned customers

The unfortunate reality is that you can’t save every customer. What you can do though is to learn from churned customers by asking them questions like:

• What stopped you from renewing your subscription?
• What could we have done to stop you from leaving?
• What made you choose to try another tool?

This kind of churn analysis will give you valuable insights you can use to inform product development and prevent churn for similar customers in the future. 

Lower your churn rate with better pipeline generation

In a nutshell: the key to churn reduction is building better relationships with users.

Reach out to champions at target accounts to learn about their goals and how they’re using your tool. Then identify ways to help them hit their targets.

At the same time, study customer behavior in your app and on your website. Understand which features people use the most, where they struggle, and what content they consume. Use the data you gather to fuel product development and identify ways you can multiply the value your tool offers.

Most of all, target and close best-fit deals. Try adding UserGems to your toolkit to identify warm leads that are well-aligned with your ideal buyer profile.

Companies like Gong, Cobalt, and Lattice use UserGems to generate and protect revenue efficiently. Book a free demo today to learn how UserGems can help you retain customers better.