Customer acquisition costs (CAC) are no small part of the cost of doing business for most enterprises. And, once you’ve invested time and effort in getting that new customer to sign up for your SaaS, the last thing you want them to do is cancel.

But, the churn is real.

What can SaaS companies do to reduce customer churn?

In Making Sense of Customers Who Cancel, behavioral scientist and UX researcher Stephanie Habif says you should take a behavior design approach to uncover the reasons your customers don’t stick around. Here are the basics:

To reduce customer churn, you need to understand why your customers cancel in the first place. Behavioral analysis can help you uncover the reason behind your customer’s decision to say good-bye.

How can you get started?

First, develop a few hypotheses. What are your best guesses for the reasons your customers cancel?

Next, look at the data. What patterns and behavior groupings do your analytics reveal?

Third, define cohorts for deeper investigation. A customer who cancels within thirty days may have a different motivation than one who left after six months.

And, remember to use both qualitative data to guide your analysis. When a customer wants to break up with you, ask open-ended questions that allow them to tell you why it’s you and not them.

Once you’ve collected your data, you use the Hooked behavior model developed by author Nir Eyal to identify your action items.

What are the components of the Hooked customer journey?

Hook loop

Triggers. These are the touchpoints in the customer journey that induce them to sign up and use your app.

Actions. Are your customers taking the next step?

Rewards. What incentives do your customers have to keep using your app? Once your customers take the desired action, are they being rewarded? Every time?

Investment. When a customer has reminders and reasons to use your app and receives benefits from doing so, a habit develops. The customer becomes invested.

How can you use this model to reduce churn? Use the data you’ve collected to identify the weak links in your Hooked customer journey. Did your customer forget all about your app? Or, maybe, they didn’t get the benefit they expected when they did login. Are your customers avoiding making a commitment?

When it comes to stopping churn, knowledge is power. And you can use the power of behavioral analytics to ensure that your CAC is worth the investment.

You can view the full article by Stephanie Habif here.‍

To discover how Raaft can lower your Churn for your Saas, book a demo today!

Adam Crookes
Written byAdam Crookes
Reviewed byMiguel Marques

📢 Why Listen to Me?I work with both bootstrapped and VC-backed SaaS companies to develop scalable inbound marketing strategies.

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