How to Prevent Product-Led Growth Customers from Churning? Top 5 reasons

How to Prevent Product-Led Growth Customers from Churning? Top 5 reasons

Top 5 reasons for Product-Led Growth customer churn


1?? Price

2?? Out of Business

3?? Integrations

4?? Not Feeling Heard

5?? No need anymore / No more champions


?? PRICE ??

It’s competitive out there ??

There will always be a cheaper option out there

You need to use pricing defensively ??

And you need to use pricing offensively ???

Our team had to face to renewal conversations about pricing

We were also "going after" competitors' customers using our freemium tier

Pricing will be a forever contentious reason

Customers want to cut back on cost ??

What customers are truly thinking…

?? Am I getting a good deal???

?? Do I feel reassured that it's a good deal???

?? Can someone else give me a good deal???

How we overcame this…

Help gain confidence by providing guidance ??

"We know what you need (with compliance)" ??????

Today and tomorrow?

We are here to guide you through it ??

Your renewal is a reassurance that "things will be taken care of"

Sometimes, we make the case...

?? by throwing in another advanced feature

?? providing more professional services

?? cutting costs just a little bit

When you cannot reassure your customers ???

Then there’s churn due to pricing

But the underlying reason is to feel assured

And customers don't want to be played for as a fool



?? OUT OF BUSINESS ??

Expect it It is outside of our control ??

What we can do is detect the timeline leading up to it

We know this because they are less active on the platform

They are not using

They have other fire to put out internally first ??

But are our solutions unlocking revenue and savings

^ ^ ^ Is your software helping them with sales???

You need to remind your customers

So they are less likely to cut back on your solutions

As they approach out-of-business

This needs to be a check-in and reminder using Executive Business Reviews ??

What we didn't do… ??

Have better communication internally on upcoming churn

Having a heads-up with executives about forecasting

Forecasting helps leadership with what needs to be done to recover revenue goals ??

Out of Business is a churn you need to account*** for in your reporting

It’s beyond our control

But don't be surprised when it happens ?? ?? ??

Set expectations with your executive team about signs of customers' OOB




?? INTEGRATIONS ??

Today, customers have established workflows ??????

Many adopted point solutions

It’s like a spider web, you cannot untangle ???

Previously, SaaS softwares would say…

"We sync with Zapier"

"… You can sync everything from there" ????

In 2024, customers expect more ??

A deeper integration experience

Seamless

Automated ??

We lost customers because we didn't have integrations

You will too… ??

How we circumvent this?

We reassured our customers

In customers' mind ??

They list out the tools they use

And ask, "Do you have these integrations?" ??

We did not…

But the real question is

?? Does their outcome NEED our software to integrate with those tools? ??

Most of the time…

They do not need those integrations

Our competitors tout all how many integrations they have…

It’s not about the number of integration library

It’s about how many integrations the customers actually needs… ??????

If our software don't have it

There should be a manual way to accomplish this

We inform our customers and help them with the manual way ??

And reassure them it’s very low-effort ??

Reassure your customers

It's not integration…

Its “How much time do I have to spend on this?” ??

Provide customers a playbook so they can execute with confidence


?? NOT FEELING HEARD ??

Customers have requests

They have feedbacks ??

When we put on our customer success hats ??

We need to reassure customers

?? By developing success plans for them

?? By consulting them on alternative solutions

?? By setting expectations with them

Initially, we were pushing back on our customers ??

We tell them we don't have what they are looking for

It ends the email

But it trickles into poor customer success ??

You can "feel" the tone the customer have with us over email

?? "Why don't you have it?"

?? "Feels like I am not getting what I need"

?? "XYZ has this feature"

We transitioned into

???? Acknowledging our customers

???? Provide them with work-around

???? Reassure them that other customers can proceed without it

Here’s what we say…

???? "Sounds like it’s a difficult experience for you"

???? "You can try another way… like edit and then upload"

???? "Typically, other customers can move forward without this, I am happy to connect you to some of them so they can share their experience"

Its an art ???

To having great customer success

Something you can control

By being an expert in your product

And knowing more about the customer segment inside and out

So you can reassure them with acknowledgement and guidance ??


?? NO NEED ANYMORE / NO MORE CHAMPIONS ??

We have seen a number of time

Champions leave ??

Expect churn will happen ??

The champion knows how to use your product

Other folks on their team …

… Not so much … ????♀?

We had customers' champions leave

We had to restart the onboarding process again

Activating new users

Educating them on the process

Often times…

It’s too late… ??

Customers told us the champion is already laid off ????♀?

Or

The champion didn't leave any instructions ????♀?

Reflecting back…

What can we do better?

Prepare a contingency plan ??

Reassure the "Buyer" that we have a hand-off plan ????????

Even without the champion, “We can guide your team through this” ????

Recognizing that we need to develop relationships with the whole buying committee

Not just an individual…

Its controllable

Get ahead of it

Prepare contingency plans in case champions leave ??



Anticipate churn will happen in Product-Led Growth

It’s important to hone in on the revenue, NRR, ARR forecast

Partner with your teams (Product, Engineering, Sales) on churn

Develop plans to reassure your customers ??

Stay on top of churn reasons so you can mitigate it ??

Communicate with your leadership team ???

So you have plans and roadmaps to recover revenue and business growth ??


Follow me at growthwithgary.com

Or

Learn more at https://www.youtube.com/@GaryYauChan/videos




Matt Brown

Helping B2B SaaS GTM teams grow revenue faster | CEO @ CustomerOS | Try our free forever (modern) Salesforce alternative

1 个月

The main reason PLG customers churn is because they were never sold to begin with. PLG works in exactly one scenario -- when your product has strong user network effects. If your product doesn't get more valuable to the user when more people join (most SaaS), and they're on a free tier, they either don't have budget or are not committed to the change your product enables.

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