For a SaaS startup business, keeping customers longer is a vital goal of operations. After all, the longer they stay, the more you earn. As such, cancellations can be a headache. So, how do you deal with them? And how do you get people to come back? Let’s explore the answers.
Understanding The Reasons For Cancellations
The first thing that you need to look into is why cancellations happen in the first place. Note that there might be a multitude of reasons for this. And each reason might be unique for a given customer. Here, there are a few reasons that you would want to consider first.
Not Enough ROI
The first reason you might encounter is users canceling their subscriptions because they do not see any return on investments. That mainly has to do with the expectations they have about your service. When those expectations are not met, they become less interested in continuing the service.
Image from New Breed Revenue.
Note that this can be subjective. Each business has a different idea of the ROI they want to attain. However, you can still find signs where cancellations might be due to this reason. For instance, late implementation of some features can result in them being unable to determine the ROI your service offers. With that, there would be a strong chance that they might cancel before you can have the features available.
Feature Diversity
Another reason people might want to cancel their SaaS subscription is the availability of features. Interestingly, both extremes of having too little or too many features can result in it. With the first one, it’s fairly obvious. If people can’t find the features they need, they stop using your product.
Image from Spiceworks.
The latter might come as a surprise for you. However, having too many features available can end up overwhelming users. And this can cause them to conclude that your product might not be the right one for them, resulting in a cancellation.
Internal Changes Within The Client
Sometimes, the customer does find your product useful. However, internal changes in their organization can still result in cancellations. For instance, the chief advocate of your product might leave the organization. Or new management that comes in might not have your service in their business priorities.
Image from Paldesk.
Another instance here is if the client changes its orientation. Either they might expand or downsize their operations. Depending on the effect of these changes, they might not have any more use for your service as of current.
Customer Service Issues
This is probably one of the more obvious reasons. But it is still something that your SaaS startup company can overlook. Even a single instance of poor customer service can trigger a cancellation. Hence, be careful when providing the needed service for your users.
The Difficulty Of Canceling A SaaS Subscription.
As with other forms of churn, subscription cancellation will always be a part of running a SaaS startup company. However, some companies might be too eager to lessen these that they resort to some unwarranted approach. Here, they may try making the cancellation process harder than it should be.
Some of the common tactics that companies might employ here include the following.
- Auto-renewals without sending alerts: The service automatically renews a subscription without first prompting the user.
- Requiring additional steps for cancellations: Sometimes, the customer might have to call or send an email for their cancellation request to proceed.
- Hard to find cancel button: The cancel button might be buried down a page or hidden within a menu.
- Charging an inactive account: A service might still charge a user account even if it has been dormant for some time.
Note that some of these issues might not be intentional on the part of the service. For instance, some might be just faulty designs. Nevertheless, making it hard for users to cancel subscriptions can end up making them want more to do so.
How Your Startup Business Should Deal With Cancellations
The best way that your SaaS startup company can deal with cancellations is by making the process easy for customers. There should be no obstacles that prevent them from closing their accounts more quickly. However, you might still wonder, is there a way to convince them to stay?
Image from UX Design.
This is where a cancellation flow is a useful tool to have. It is essentially the process customers go through for their cancellation request to be approved. But what makes having such a process essential is that it allows you to understand the reasons for cancellation more clearly. You also get an idea of the ways you can retain a customer.
Preventing The Cancellation
The first stage of the process is trying to prevent cancellation. Here, look into any issues that they might be having. Once you have the reason, you can provide them with various options to solve these problems.
Another way that you can encourage customers to stay is by offering different options on how they can use their accounts in the meantime. Some of the options you can provide are:
- Downgrade their account: They can switch to a lower tier plan to pay less.
- Offer a discount: You can provide a discount for their extended use of your product. That can work to convince them to stay and see the product’s value.
- Offer to hibernate their accounts: They can have their accounts temporarily paused. The customer can then come back and reactivate it at a later date.
- CSM consultation: If your customers have more concerns, you can schedule an appointment with success managers for them.
These options might not always guarantee that the customer will forego the cancellation request. But knowing that they have these options can also help them reconsider returning in the future.
Offboarding The Customer From Your Startup Business
In cases where the customer has already made up their mind to terminate their account, you need to make the offboarding process easy for them. Make the process possible in as little as a single step. Here, you can still remind them that they can return later if they want.
Image from Aero.
If there are some necessary processes like deleting data, have a customer service representative assist them here. That is so that they don’t take too much time accomplishing these. You can also provide some automation to do things faster.
Don’t forget to capture feedback and other information before the customer leaves. As with other steps, this should be quick. A single-question survey asking the reason for the cancellation will often suffice.
Helping Your SaaS Startup Business Deal With Cancellations
Dealing with cancellation requests can be a rather tedious process. Virtua Solutions is ready to help your startup business to handle them better. Our team will be ready to process these requests while you focus on other customers. Contact us today and we will have our support agents handle these in your stead.