What are the most common reasons for low software retention rates?

Poor ICP fit is definitely the main churn reason. Customers might have no real need in your product, there was no real pain or a problem on their side which your product could solve. So, always listen to your customers purchase decision reasons and keep asking "why"

When a partnership isn't a good fit from the start, the tools are never utilized the way necessary for long term success. As a result, customers typically don't need the product and really need something else.

In my experience of the main reason for low software retention is that customers do not receive a tangible value for the product. If they never understood the full business value of your product capabilities, then when budgets get cut, the products with the lowest business value will be out.

This is key and in order to have a proper onboarding and training in place you need to have things clear since the discovery stage. You need to understand which features will your prospect use, which ones are relevant for them and for the entire business. So you can go ahead and define a proper training process.

The partnership handoff is the most important transition that will determine the long-term success of the partnership (given there is a good product fit). If your new customer doesn't have all the resources, support, and training to maximize the usage of your product/service, there is a high chance the partnership won't last long term.

A customer needs more than QBR to stay engaged during the course of a partnership. It's great to send automated follow-up to keep them up to date on general communication, but the personalized touch points are the most important aspect of building a strong relationship.

Most products are in a very competitive space where there is likely always someone who is doing exactly what you do, but finding ways to do it better and cheaper. Stay up to date on your competitors frequently to keep your edge and minimize churn to other providers.

You need to have advocates to promote your product. If your product is not having advocates this is definitely a red flag, your efforts should be focused to improve customer satisfaction and loyalty.

I would say that if you lose your champion on the customer side, churn chances are very high. Unless you take a full circle too sell it again to new team in charge

I want to put here my additional list for churn reasons - ones that are not listed here: - Poor product performance (yes, it is quite popular): failure to deploy, bugs and severe performance issues, failure to deploy - Product owners change on the customer side. The New Champ (decision maker) might not be aware of what your product does and will bring in an alternative solution he knows better - Weak product support: bad experience with your CSM or support team can trigger your product replacement decision - Steep price increase at renewal. We all expect that SaaS products will cost 5-7% more yearly. But I have met products with 20+% increase YoY. That can trigger churn. I suggest to be careful bumping up prices with existing customers