Reducing SAAS Churn with Customer Journey Maps

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Imagine with me for a moment . . .

You own SaaS company. You typically onboard 30 new clients each month, with an average spend of $850 per account.

However, with an average monthly churn rate of 7%—which is alarmingly high, although not uncommon in the B2B space—you’re losing several thousand dollars a month.

All things remaining equal, in this scenario, you will lose tens of thousands in revenue over the course of one year. (For those of you who are more mathematically inclined, I recommend clicking the link above. You’ll see all sorts of equations that will help you understand this point more clearly).

It’s easy for many SaaS companies to neglect a few thousand dollars here and there, especially when experiencing significant growth month over month; however, even rapid growth with a monthly churn rate hovering above 5% can prove your organization’s downfall.

The good news is that SaaS churn doesn’t have to be “just a fact of life” for your company. Creating customer journey maps can aid your organization in reducing overall SaaS churn, and putting your organization on a path to permanent and sustainable growth.

What is a customer journey map?

Put simply, a customer journey map is a diagram that lays out the steps a real or hypothetical customer makes as they engage your organization at different touchpoints before ultimately deciding to buy your product or service.

A successful customer journey map allows you to identify customer pain points at various buying stages, which in turn allows you to analyze the types of emotional responses that are associated with customer problems, questions, and experiences. Knowing this information allows you to identify the gaps in your service and strategy that will help prevent potential and existing customers from walking out the door.

How do customer journey maps help reduce SaaS churn?

Mapping the customer journey can help reduce SaaS churn in your organization in at least three ways:

1. You can identify the problems your customers have with onboarding.

Numerous B2B SaaS companies have lost customers due to poor onboarding experiences. By diagramming the customer journey, however, you will have a clearer understanding of customer expectations during the onboarding process, as well as the problems they may encounter as they begin to use your product. With more data and knowledge about customer onboarding, you can eliminate a slew of customer concerns and subsequently move towards a negative churn rate.

2. You can increase communication with customers at various touch points.

SaaS companies that are experiencing rapid growth occasionally neglect customers who have been successfully onboarded, and who are keeping up with their regular monthly payments. Unfortunately, this type of behavior disregards any problems these customers may be experiencing, or any questions they may have that are not being vocalized. When these customers’ quarterly budget meetings come around, they usually determine that their SaaS tool is not worth paying for and they drop the service.

By creating customer journey maps, your organization can avoid the scenario described above. Charting customers’ buying journeys allows you to work through a series of scenarios that customers are likely to experience, as well as identify their associated emotional responses, and develop solutions that can be communicated to various customers at opportune moments in their respective journeys. Communicating about and solving customers’ problems before they become actual problems is one of the best ways to reduce churn.

3. You can define the reasons why customers leave.

Carefully crafting customer journey maps allows your organization to clearly define the potential reasons customers choose to opt-out of paying for your product or service. For example, Groove, a SaaS startup, was able to reduce churn by 71% once they identified why their customers quit. By examining past reasons for client drop-off, as well as generating lists of possible reasons a customer might quit your service, you will be prepared to engage customers, solve their problems, and ultimately lower your churn rate.

Reducing churn is critical to B2B SaaS sustainability and profits. As your organization develops methods for mapping the customer journey, you’ll experience rapid revenue acceleration and increased customer satisfaction.

Much success,

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