The most effective way to reduce churn is to understand the issues causing it and rectify them. A good cancellation flow will enable you to identify these issues and it might also help prevent cancellations, too. In this article, we’re going to show you how to reduce churn with a SaaS cancellation flow.
Let’s start by clarifying what a cancellation flow is. It’s an in-app experience that provides a process for your users to cancel their software subscription. Ultimately, this flow is designed to understand the reasons your user wants to cancel and if possible, to prevent it.
For the purpose of this article, we’re going to reference a cancellation flow we’ve recently designed for Virtual Summits Software. So, let’s take a look at 3 things your cancellation flow needs to address in order to reduce churn.
1. Prevent the Cancellation
First of all, you want to attempt to prevent the cancellation. Here you try to retain the user by rectifying any issues they might have. The first step is to ask the user why they want to cancel. We present a selection of reasons each of which has a different response, depending on which they select. For example, if the user selects that they are “Having difficulty using the software”, we can respond with the option to connect them with customer support.
Another common reason for cancelling might be that the user doesn’t currently have a need for the software. In some instances, this might be temporary and therefore providing the option to pause the subscription and retain their account data might be the best solution. We’ve observed this to be a particularly popular option for SaaS companies during the pandemic.
2. Handle any Objections
The second thing you might wish to do is to attempt to handle any objections the user might have. A typical objection could be around pricing. If your user selects that they think the price is too costly, you can attempt to handle this by having them review whether they’re on the right plan and suggesting a downgrade, if this is the case. You might also handle this by offering a temporary discount, particularly if they’re a startup that may have a greater requirement in future.
3. Capture Information
The third thing you want to achieve with your cancellation flow is to capture information, both about the profile of users who are cancelling and their reasons for doing so. Based on your users’ reasons for cancelling, your flow should respond with relevant questions designed to capture further information. For example, for the case we’ve discussed earlier where a user is having difficulty with the software, we can ask them to explain their specific challenge in greater detail. You can use these insights for feedback on what to improve about your product.
Monitoring the type of users who cancel can also provide insight into the profiles who are less successful with your software. That way you can further develop your ICP.
In summary, it’s important to provide a good cancellation experience so that your user is left with a positive impression. Although data shows that users returning after they cancel is fairly uncommon, leaving a positive impression does make this more likely. Perhaps even more probable is the benefit of referrals via word of mouth from those who have received value using your software and were left with a good experience when they cancelled.
If you need help designing a cancellation flow for your SaaS please reach out to us at UserActive.io. In the meantime, I hope you manage to reduce churn by gaining a deeper insight into the common causes for cancellation in your SaaS. That way you can continue to improve your product, get more users and grow.