10 reasons why customers unsubscribe from the product
This article was written with Ekaterina Korneeva (Customer Success Manager). Ekaterina is a professional with 4 years of experience in sales and customer service.
In today's high-tech world, sales of products are often built on a subscription-based model (SaaS). On the one hand, the Internet has erased the boundaries between countries and leveled the playing field - tiny startups can compete in international markets with recognized corporations. On the other hand, it has created a lot of headaches for directors and business owners who are used to working in the traditional way. Today your company has to compete with a large number of market participants.
In the traditional model, the company received the bulk of revenue at the time of sale of the product. After the sale, she could not make such a big bet on the provision of high-class customer service.
The situation with the new subscription-based model is completely different. Now companies receive a relatively small percentage of income at the time of sales, and the main source of profit is to provide value to the customer on a continuous basis. The key task is to please the client so that he continues to renew his subscription. But sometimes the client still decides not to use your product anymore. In the SaaS business, we call this “unsubscribe from the product” or “churn.” We formulated 10 general reasons for unsubscribing from the product and suggested solutions for each of them.
* Many SaaS companies call the champion a key employee in the company's client, who decides to start using the product and takes steps to implement it throughout the company.
Such a reason to unsubscribe from the product can be really offensive. After all, you have done a great job in establishing contact with the client, you have spent time studying the business goals, you know his plans and expectations.
But suddenly your champion calls you and says that now the new employee will be responsible for the processes built with the help of your product or service. This means not only that you need to keep up to date with the new champion, sometimes you will be required to re-sell your product to this new employee.
How to avoid it:
One of the best ways to avoid this is to build strong relationships not only with your champion, but also with a number of other stakeholders. These may include the heads of departments in which they use your product, managers of specialized teams, or company opinion leaders.
In this case, when you change the champion, you will have a relatively large group of supporters of your product, whose opinion has weight in the company. At Wrike, we try to collect contact information for at least 3 interested parties.
A regular customer survey is also considered a good practice: “How does our product help your organization?”. The more arguments you collect, the stronger your position in the renewal negotiations will be.
The situation is similar to Reason No. 1. It is not an easy task to sell your decision to a person who is already used to another product. When a new manager comes to your client’s company, he very often seeks to make a number of changes, improve existing processes, introduce innovations, etc. Moving from one tool to another can be part of their change management strategy.
How to avoid it?
The task is not simple. The new manager most likely used the competitor's product for a long time and was quite pleased with it, but does not want to learn a new tool. So what can you do in this situation?
First, the transition to a new product usually does not happen in one day or a week. You will have some time to prove the value of your decision and the new leader. Start by gathering information on customer problem areas that your product solves. Then try to estimate (at least approximately) the cost of switching to another tool. Then gather the opinions of your supporters in the company. Finally, provide this information to the new supervisor. If you are well prepared, your arguments will be quite convincing.
Your product can be super effective. As brilliant as the other 15 solutions that the client is currently using. But one of the main advantages of the SaaS product is the ability to integrate with these other tools.
By itself, this fact does not always help. Suppose your product has an open API and a number of built-in integrations. But the client wants the integration to be carried out by your company. He simply may not have a full-time engineer for such integration. Or its IT department does not want to add any integration for security reasons. But as a result, the client may leave you if his expectations on integration are not met.
How to avoid it:
First focus on how your product has already helped your customer. (You have already prepared arguments for working with Cause 1 and Cause 2, right?) If you have an API, you can find a third-party organization that provides integration building services at a reasonable price. But prepare the concrete and tangible benefits that the client will receive by building the integration on their own and at their own expense. For example, a customer pays for the integration and receives a packet of additional hours with your CSM. Or perhaps you decide to add an additional training session.
Based on best practices in Wrike and some other companies, below 3 excellent options to support integration initiatives:
What can be done in a situation when your client needs a CRM ( customer relationship management ) system, and he gets a solution for project management? Or when he was informed about the release of a new functional, including a wide range of new functions, and in fact, none of these functions were added to the technological roadmap? Of course, you can search for all new workarounds that close client’s problem areas for a while, but what if you don’t find another one at a critical moment?
How to avoid it:
In fact, this problem can be solved relatively easily. Tie sales department bonuses not only to the number of closed deals, but also to the customer retention rate. In this case, the sales department will not enter into contracts if the decision of your company does not meet the needs of the client. Such an approach will meet with strong resistance from the sales department, but the results are definitely worth it.
Clients are getting bigger and more experienced, but you may not be able to keep up with their growth. They need new functionality or integration, and you have nothing to offer.
How to avoid it:
Your development team should plan it in advance. You can collect feedback from your customers on a regular basis (we hope that you are already doing this), group it according to certain criteria (for example, client size or annual income) and use the results in the future when setting priorities for planning new features. In this case, the needs of your most valuable customers will always be taken into account.
Sometimes you should be able to recognize that competitors can offer functionality wider than yours. Customers will begin to ask why they should continue to use your product if they pay more and get less (or as much).
How to avoid it:
In order to work through this problem, you first need to gather information, why the client initially decided to use your solution, and not the services of competitors, and how your product has already helped the organization. Price is not always the deciding factor. Rather, the value that you provide plays a big role. Your competitor may offer a much wider functionality, but it is much more important what kind of functionality the client needs.
Also focus on the costs of moving from one solution to another. It will take time for client teams to get used to the new tool, especially if the majority of employees are loyal to your product.
If you get comments from customers about the low level of your service, then you better listen to them. Otherwise it is only a matter of time when you lose your customers.
How to avoid it:
Only one solution is possible here. You must provide a high quality service. Point.
So, you just signed a contract with a client. But it is too early to celebrate. The process of initial training of new users and technical configuration of the product determines the entire future path of the client. Will the customer accept your product and continue to use it or stop renewing your subscription? The process of product development is always a challenge for the team. Do not expect quick results. But if you don’t spend enough time working out the needs of the client at the very beginning, each time he will be more and more dissatisfied with your product. At some point, this client will simply leave you.
How to avoid it:
We have already mentioned above, but we will repeat it again - ask the right questions. Ask them all the time. Ask questions at an early stage to understand customer goals. Conduct regular customer health checks * (especially during the first few months of use) to understand how things are going. If a champion and several managers are satisfied with the tool, this does not mean at all that the whole company has successfully completed the process of initial product development.
* customer health check - a process carried out on a regular basis, during which it turns out how the product helps the company in achieving the goals set at the initial stage; how much the planned indicators correspond to the real ones, etc.
Conduct additional training sessions for different teams and departments. Sometimes it can be very useful to organize an open session in a “question-answer” format for all the client’s employees who use (or plan to use) your solution. Do not ask: “What functionality do you not understand?” Instead, ask: “What problems do you want to solve with our service?” The answers may surprise you, and the way you use your product may be very different from what you intended.
The best practice in the industry is to conduct quarterly business evaluations. They do not need to arrange in a rigidly defined time period. However, they must be strategic, focused and regular. During these surveys, go back to the original questions you asked before your product was used by the customer.
One of those key questions: “When you decided to use our product, you identified the following goals. Have you achieved them, and are there any additional goals? ”
As your product expands into new markets, you will have to increasingly interact with international customers. This will be a signal for you that it is time to go beyond the limits of the English language. The language barrier can be a major problem in the dialogue.
How to avoid it:
Start by translating your help resources (help center, documents, videos, etc.) into different languages. Start with the most popular and work on increasing the number of available languages.
If the budget allows, consider the option of hiring customer success managers and product implementation consultants who speak the native language of your customers. Usually these are the main expenses of the company in this case, so make sure that the market responds positively to such steps before taking them.
One of the most difficult reasons. You did a good job. At your disposal were all the materials and resources. But something went wrong. For some reason, it just didn't work.
How to avoid it:
Among other things, people should themselves want to change something. Therefore (and yes, we again focus on this) ask a lot of questions. Talk with members of different teams, determine their goals and problem areas. Work with each team separately and demonstrate the value of using your product. Match the results with the needs of the client’s employees — it’s worth your effort.
It will also be useful to develop materials on the technical development of the product. At Wrike, we have several change management webinars that are particularly popular with our customers. We also developed several PDF documents on coping with implementation issues that are sent to our customers. If you have a community or product forums, you can create a change management topic and engage as many of your customers as possible in a dialogue.
You can deal with some of the listed reasons for unsubscribing from the product yourself, while you can’t influence others. By taking preventive measures, you will be ready for any of the scenarios.
In today's high-tech world, sales of products are often built on a subscription-based model (SaaS). On the one hand, the Internet has erased the boundaries between countries and leveled the playing field - tiny startups can compete in international markets with recognized corporations. On the other hand, it has created a lot of headaches for directors and business owners who are used to working in the traditional way. Today your company has to compete with a large number of market participants.
In the traditional model, the company received the bulk of revenue at the time of sale of the product. After the sale, she could not make such a big bet on the provision of high-class customer service.
The situation with the new subscription-based model is completely different. Now companies receive a relatively small percentage of income at the time of sales, and the main source of profit is to provide value to the customer on a continuous basis. The key task is to please the client so that he continues to renew his subscription. But sometimes the client still decides not to use your product anymore. In the SaaS business, we call this “unsubscribe from the product” or “churn.” We formulated 10 general reasons for unsubscribing from the product and suggested solutions for each of them.
Reason number 1: change champion *
* Many SaaS companies call the champion a key employee in the company's client, who decides to start using the product and takes steps to implement it throughout the company.
Such a reason to unsubscribe from the product can be really offensive. After all, you have done a great job in establishing contact with the client, you have spent time studying the business goals, you know his plans and expectations.
But suddenly your champion calls you and says that now the new employee will be responsible for the processes built with the help of your product or service. This means not only that you need to keep up to date with the new champion, sometimes you will be required to re-sell your product to this new employee.
How to avoid it:
One of the best ways to avoid this is to build strong relationships not only with your champion, but also with a number of other stakeholders. These may include the heads of departments in which they use your product, managers of specialized teams, or company opinion leaders.
In this case, when you change the champion, you will have a relatively large group of supporters of your product, whose opinion has weight in the company. At Wrike, we try to collect contact information for at least 3 interested parties.
A regular customer survey is also considered a good practice: “How does our product help your organization?”. The more arguments you collect, the stronger your position in the renewal negotiations will be.
Reason # 2: A new employee who makes a decision in a client company loves your competitor's product.
The situation is similar to Reason No. 1. It is not an easy task to sell your decision to a person who is already used to another product. When a new manager comes to your client’s company, he very often seeks to make a number of changes, improve existing processes, introduce innovations, etc. Moving from one tool to another can be part of their change management strategy.
How to avoid it?
The task is not simple. The new manager most likely used the competitor's product for a long time and was quite pleased with it, but does not want to learn a new tool. So what can you do in this situation?
First, the transition to a new product usually does not happen in one day or a week. You will have some time to prove the value of your decision and the new leader. Start by gathering information on customer problem areas that your product solves. Then try to estimate (at least approximately) the cost of switching to another tool. Then gather the opinions of your supporters in the company. Finally, provide this information to the new supervisor. If you are well prepared, your arguments will be quite convincing.
Reason 3: Problems with Integration
Your product can be super effective. As brilliant as the other 15 solutions that the client is currently using. But one of the main advantages of the SaaS product is the ability to integrate with these other tools.
By itself, this fact does not always help. Suppose your product has an open API and a number of built-in integrations. But the client wants the integration to be carried out by your company. He simply may not have a full-time engineer for such integration. Or its IT department does not want to add any integration for security reasons. But as a result, the client may leave you if his expectations on integration are not met.
How to avoid it:
First focus on how your product has already helped your customer. (You have already prepared arguments for working with Cause 1 and Cause 2, right?) If you have an API, you can find a third-party organization that provides integration building services at a reasonable price. But prepare the concrete and tangible benefits that the client will receive by building the integration on their own and at their own expense. For example, a customer pays for the integration and receives a packet of additional hours with your CSM. Or perhaps you decide to add an additional training session.
Based on best practices in Wrike and some other companies, below 3 excellent options to support integration initiatives:
- Prepare detailed integration documentation that will be available in your support service.
- Create a special section in the community / product forums where customers can ask questions about integration and support.
- Consider creating a team that specializes in building integrations at the request of the client according to their individual requirements and specifications.
Reason 4: Unrealistic Expectations
What can be done in a situation when your client needs a CRM ( customer relationship management ) system, and he gets a solution for project management? Or when he was informed about the release of a new functional, including a wide range of new functions, and in fact, none of these functions were added to the technological roadmap? Of course, you can search for all new workarounds that close client’s problem areas for a while, but what if you don’t find another one at a critical moment?
How to avoid it:
In fact, this problem can be solved relatively easily. Tie sales department bonuses not only to the number of closed deals, but also to the customer retention rate. In this case, the sales department will not enter into contracts if the decision of your company does not meet the needs of the client. Such an approach will meet with strong resistance from the sales department, but the results are definitely worth it.
Reason 5: Scalability Issues
Clients are getting bigger and more experienced, but you may not be able to keep up with their growth. They need new functionality or integration, and you have nothing to offer.
How to avoid it:
Your development team should plan it in advance. You can collect feedback from your customers on a regular basis (we hope that you are already doing this), group it according to certain criteria (for example, client size or annual income) and use the results in the future when setting priorities for planning new features. In this case, the needs of your most valuable customers will always be taken into account.
Reason number 6: inconsistency of price and value of functionality
Sometimes you should be able to recognize that competitors can offer functionality wider than yours. Customers will begin to ask why they should continue to use your product if they pay more and get less (or as much).
How to avoid it:
In order to work through this problem, you first need to gather information, why the client initially decided to use your solution, and not the services of competitors, and how your product has already helped the organization. Price is not always the deciding factor. Rather, the value that you provide plays a big role. Your competitor may offer a much wider functionality, but it is much more important what kind of functionality the client needs.
Also focus on the costs of moving from one solution to another. It will take time for client teams to get used to the new tool, especially if the majority of employees are loyal to your product.
Reason number 7: low level of service
If you get comments from customers about the low level of your service, then you better listen to them. Otherwise it is only a matter of time when you lose your customers.
How to avoid it:
Only one solution is possible here. You must provide a high quality service. Point.
Reason 8: unsuccessful technical onboarding.
So, you just signed a contract with a client. But it is too early to celebrate. The process of initial training of new users and technical configuration of the product determines the entire future path of the client. Will the customer accept your product and continue to use it or stop renewing your subscription? The process of product development is always a challenge for the team. Do not expect quick results. But if you don’t spend enough time working out the needs of the client at the very beginning, each time he will be more and more dissatisfied with your product. At some point, this client will simply leave you.
How to avoid it:
We have already mentioned above, but we will repeat it again - ask the right questions. Ask them all the time. Ask questions at an early stage to understand customer goals. Conduct regular customer health checks * (especially during the first few months of use) to understand how things are going. If a champion and several managers are satisfied with the tool, this does not mean at all that the whole company has successfully completed the process of initial product development.
* customer health check - a process carried out on a regular basis, during which it turns out how the product helps the company in achieving the goals set at the initial stage; how much the planned indicators correspond to the real ones, etc.
Conduct additional training sessions for different teams and departments. Sometimes it can be very useful to organize an open session in a “question-answer” format for all the client’s employees who use (or plan to use) your solution. Do not ask: “What functionality do you not understand?” Instead, ask: “What problems do you want to solve with our service?” The answers may surprise you, and the way you use your product may be very different from what you intended.
The best practice in the industry is to conduct quarterly business evaluations. They do not need to arrange in a rigidly defined time period. However, they must be strategic, focused and regular. During these surveys, go back to the original questions you asked before your product was used by the customer.
One of those key questions: “When you decided to use our product, you identified the following goals. Have you achieved them, and are there any additional goals? ”
Reason number 9: language barrier
As your product expands into new markets, you will have to increasingly interact with international customers. This will be a signal for you that it is time to go beyond the limits of the English language. The language barrier can be a major problem in the dialogue.
How to avoid it:
Start by translating your help resources (help center, documents, videos, etc.) into different languages. Start with the most popular and work on increasing the number of available languages.
If the budget allows, consider the option of hiring customer success managers and product implementation consultants who speak the native language of your customers. Usually these are the main expenses of the company in this case, so make sure that the market responds positively to such steps before taking them.
Reason # 10: Failure to make changes.
One of the most difficult reasons. You did a good job. At your disposal were all the materials and resources. But something went wrong. For some reason, it just didn't work.
How to avoid it:
Among other things, people should themselves want to change something. Therefore (and yes, we again focus on this) ask a lot of questions. Talk with members of different teams, determine their goals and problem areas. Work with each team separately and demonstrate the value of using your product. Match the results with the needs of the client’s employees — it’s worth your effort.
It will also be useful to develop materials on the technical development of the product. At Wrike, we have several change management webinars that are particularly popular with our customers. We also developed several PDF documents on coping with implementation issues that are sent to our customers. If you have a community or product forums, you can create a change management topic and engage as many of your customers as possible in a dialogue.
You can deal with some of the listed reasons for unsubscribing from the product yourself, while you can’t influence others. By taking preventive measures, you will be ready for any of the scenarios.