How to Reduce SaaS Churn Rate Through Effective Reporting

By Jillian D'Arcy on August 04, 2015

churn saas reporting

Losing customers is expensive. A study by Bain found that it costs six times more effort to get a new customer than to keep one you already have, yet a 5% increase in customer retention can generate a 75% increase in profitability.

Unfortunately, customer retention is still problematic for the SaaS industry - by some accounts 30% of SaaS providers have an unacceptable churn rate.

Why do customers leave?

  • Poor customer service - Over-committing to product innovation at the expense of customer service

  • Lack of usage - if your service is being used infrequently or not at all by your customers, they will cancel their subscription. Totango surveyed over 1 million SaaS customers and found a near-perfect correlation between non-usage and cancellations

  • Missing functionality - customers will leave for a competing service if your service isn’t providing features that can scale with growing business needs

  • Poor product performance - if your customers face too many issues from bugs in your product, they will no longer see a return on their investment and will look for a better performing SaaS

Reporting to your customers can help

The good news is that many of these issues can be solved by more effective communication. Specifically, communication of product value, features, and performance. Reporting can play a key part in this communication, and can therefore drive increased customer retention.

What do we mean by reporting?

Reports leverage your customer’s data to justify the expense of your product and to allow them to make analytical decisions.

Let’s look at a couple of examples of good reporting from several SaaS companies.

Pipedrive offers a report that visually shows the key metrics in its customer’s sales pipeline. The report demonstrates Pipedrive’s value in effectively organizing and assisting with the sales process whilst also giving high-level metrics on organization performance.

image pipedrive screenshot

Intercom sends its business customers a daily email report on their new customers and any that are slipping away. Sending the report by email means that individuals who are not using the software day-to-day still have a good sense of how it is performing.

image intercom.io screenshot

How does reporting improve customer retention?

Simply, reports communicate to your customers that your service is adding value to their business. Secondary benefits include:

Enhanced Analytical abilities - Forrester Research notes that the power of data lies not in what firms share internally but rather, *“what happens when they make business data available to partners, suppliers, or third parties. Reporting provides customers with the data they need to make insightful decisions and reach their business goals.

Better feedback loops - Through reporting it is easy to spot when things are going either well or poorly. This means that feedback loops can be shorter, and product improvements easily highlighted.

The next step

The next step is to develop a reporting strategy that meets the needs of your customers. This is more complex than it sounds, as the optimal medium and format of reports can vary substantially based on use case, and audience.

At Beekeeper, we’re building a suite of best-in-class reporting tools to let business owners communicate data to their customers through email, dashboards, and APIs.

We’ll touch on this issue and more in a later blog post. Subscribe to our monthly newsletter to get notified when it goes online and to get occasional product updates.

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Jillian D'Arcy bio photo

Jillian D'Arcy

Sales Associate. Travel Enthusiast. Sweet Tooth.

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