Develop an offboarding process to increase customer retention rates.
Use a billing platform like Stripe or Servicebot that makes it easy for customers to cancel.
As a minimum, you need to provide your customers with a way to cancel their account. For example, Stripe and Servicebot both offer no-code customer portals that allow customers to manage their subscriptions.
For example, Groove started sending out a simple email that asks users to reply with why they cancelled. Groove found that the response rate was nearly eight times greater than when using exit surveys, at 10.2%, and that they were receiving actionable feedback that they were not receiving from their active customers.
Sending simple personal emails to get feedback works well in the early stages of your SaaS company, however, as your business grows, a more scalable and efficient way to find out why customers are churning will be necessary.
Create a cancellation survey that allows users to select a reason or write in their own reason using Google Forms, Wufoo, Jotform, or Typeform.
A cancellation survey is a much more sustainable way to collect feedback long-term as it allows you to categorize into broader reasons and trends. Make the survey as short as possible, asking just 1-2 questions that help you answer the question; what are the reasons customers are cancelling?.
Send the link to your survey to users after they cancel. Alternatively, if your tech stack allows, embed the form on your billing or cancellation page.
For example, Usersnap added a field in their unsubscribe page to tell them why they want to cancel. This allowed them to see the trend that customer’s had a one-time need for their product, which limited their customer lifetime value and resulted in fast churn. They then created a new product line that gave users a reason to stay longer, resulting in more long term customers and lower churn.
You can use Wobaka, Algolia, or Zapier to develop your cancellation process or automate your cancellation survey. For example, Zapier will automatically send an exit survey feedback when the membership is changed to cancel.
Set up a multi-step offboarding process to collect more contextual data on why your customers are cancelling and create opportunities to prevent cancellation.
Start by creating steps around four components:
- Select reason.
- Follow up question about reason.
- Personalized offer.
- Ask “Are you sure?”
Use a multiple choice survey to allow customers to select a reason for why they are cancelling rather than an open-text comment box for the following reasons:
- It allows you to easily categorize reasons when visualizing trends.
- You can then ask an additional question based on which reason they selected to dig deeper into why they selected that reason.
- You can also create a personalized offer to save them from churning based on which reason they selected.
For example, you can offer your customers the following reasons for cancellation:
- Technical issues.
- Too expensive.
- Switching to another product.
- Not sure how to use the product.
- Missing features.
- Other (please explain below).
Be careful not to irritate users during this process.
- Do not force users to answer questions before they can cancel.
- Do not ask too many questions.
- Do not try to emotionally blackmail users into staying.
Offer your customer’s an optional exit interview to learn how you can improve your products and services.
Exit interviews can be conducted over a phone or video call, so you can have a conversation to get deeper insights than you would be able to with a survey.
Build on the information you already have by asking:
- Why did you cancel the day that you cancelled? Why that day, and not the day before or after?
- When was the first time you had the first thought that maybe [PRODUCT] was not going to work? Or realized that you were not using it?
- What suggestions do you have for improving the product or service?
- What would it take for you to reconsider subscribing to [PRODUCT]?
- What would have prevented you from leaving?
- What could we have done differently?
Build your offboarding flow if you need flexibility, control, and customization. Using a third-party tool to handle some things saves time, but ultimately sacrifices customization and flexibility. Plan on doing A/B testing to see if certain offboarding flow variations yield better results, iterating over time, or piping the data over to other internal tools.
Ask yourself the following to help decide what is best for your business: what is the opportunity cost of spending time and resources building an offboarding flow in-house, when that time and resources can be spent building elsewhere?
Use third-party tools to save time and expertise by providing pre-built integrations, native visualizations, data crunching, and automation.
For example, when the user chooses their cancellation reason through the SaaS cancellation tool, Baremetrics, it saves to their account profile, so you can see exactly when and why each customer cancels. Third-party tools like Baremetrics can also aggregate all the data from the survey, so you can see which cancellation reasons are most common and which cost you the most revenue. After the customer selects their cancellation reason, you can create a follow-up email to send based on their response and track if they open it.