If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business; this will become a major drag on growth
If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business. At 2% monthly churn, you are losing about 22% of your revenue every year. That is nearly a quarter of your revenue! It’s a clear indication that there is something wrong with the business. As the business gets bigger, this will become a major drag on growth.
We recommend that you work on fixing the problems that are causing this before you go on to worry about other parts of your business. Some of the possible causes of churn are:
- You are not meeting your customers expectations.
- The product may not provide enough value
- Instability or bugginess
- Your product is not sticky. It might provide some value in the first few months, and then once the customer has that value, they may feel they don’t need to keep paying. To make your product sticky, try making it a key part of their monthly workflow, and/or have them store data in your product that is highly valuable to them, where the value would be lost of they cancelled.
- You have not successfully got the customer’s users to adopt the product. Or they may not be using certain of the key sticky features in the product.
- Your sales force may have oversold the product, or sold it to a customer that is not well suited to get the benefits
- You may be selling to SMB’s where a lot of them go out of business. It isn’t enough that what you’re selling is sticky. Who you’re selling it to must also be sticky.
- You are not using a pricing scheme that helps drive expansion bookings
The best way to find out why customers are churning is to get on the phone with them and ask them. If churn is a significant part of your business, we recommend that the founders themselves make these calls. They need to hear first hand what the problem is, as this is so important for the success of the business. And they are likely to be the best people to design a fix for the problem.
SaaS & Tech Growth Strategy Articles
- When to choose a Product-Led Growth Model
Even if you are already in a Product-Led model, we'll be discussing a framework for making that decision, some of the pros/cons of doing so, and even some unique alternative ways to look at a product-led growth model.
- What’s the difference between marketing and strategic marketing?
Marketing and strategic marketing is sort of like the difference between a piece of cheese and using that piece of cheese to make some delicious lasagna.
- Strategically Determining Your Tech Business Models, Markets & Industries
An in-depth exploration across the spectrum of tech markets, industries, offerings and models to find growth opportunities through understanding the competitive landscape and to envision where our endeavor fits in this grand scheme.
- Building Personas for SaaS & Tech Companies
Building Personas for SaaS & Tech CompaniesStaying ahead of the competition and connecting with your target audience is paramount. To achieve this, SaaS companies rely on a crucial tool in their arsenal: persona building. Table of Contents Getting to Know Personas for Your SaaS Business Leveraging SaaS Marketing Agencies like Insivia to Forge Robust Marketing Pillars […]
- Proven SaaS Marketing Strategies Every Agency Should Implement
Proven SaaS Marketing Strategies Every Agency Should ImplementEffective marketing is a cornerstone of success for Software as a Service (SaaS) companies in today's competitive digital landscape. These companies offer cloud-based solutions and services that rely heavily on recurring subscriptions, making consistent customer acquisition, retention, and growth vital for their sustainability. In this context, SaaS marketing […]
- The Ultimate Guide to Choosing the Right SaaS Marketing Agency
The Ultimate Guide to Choosing the Right SaaS Marketing AgencyTable of ContentsThe Role of SaaS Marketing AgenciesAssessing Your SaaS Marketing Needs: A Crucial Step Towards SuccessDefining Your Selection Criteria: Choosing the Right SaaS Marketing AgencyResearching and Shortlisting Agencies: Finding the Right SaaS Marketing PartnerThe Role of SaaS Marketing AgenciesStrategic Planning: SaaS marketing agencies work closely […]
- What a Web Design SaaS Agency Can Do For You Organization
What a Web Design SaaS Agency Can Do For You OrganizationTable Of Contents What do Web Design SaaS Agencies Do? Top 10 Elements to a Successful SaaS Website Design What Can Web Design SaaS Agencies Offer? Why Utilize a Web Design SaaS Agency What do Web Design SaaS Agencies Do?In the dynamic realm of digital […]
- How a SaaS Agency Will Change Your Conversion Rates
How a SaaS Agency Will Increase Your Conversion RatesIn the dynamic landscape of the technology industry, SaaS companies face the perpetual challenge of increasing conversions to drive growth and establish a formidable market presence. Effective marketing for tech companies, particularly SaaS companies, requires a strategic blend of innovation, customer engagement, and data-driven approaches. Collaborating with […]
- 20 Strategy-Changing Stats from a UI UX Design Agency
20 Strategy-Changing Stats from a UI UX Design AgencyUser Experience (UX) and User Interface (UI) design play a pivotal role in the success of Software as a Service (SaaS) companies. As the digital landscape evolves and user expectations continue to rise, the significance of exceptional UX/UI design has become imperative for SaaS companies to remain […]