It’s not magic that your customer database shrinking.
Nor by accident that your subscribers are declining.
You might just need to check your customer churn. (Chances are, it’s going up! 😱)
According to research, B2B businesses experience a 6% average churn rate.
So, take action and get started on reducing churn!
Start with your content. Because, actually, good SaaS copywriting plays a significant role in this—kinda like magic.
Piqued your curiosity now?
This blog post explores what your SaaS copywriter can do to make sure users stick around. But before this, let’s step back and learn the churn basics.
What is churn?
Churn refers to the rate at which a customer ceases to use a product or service over a given time periods, such as a month or a year. In other words, it's the percentage of customers who leave or cancel their subscription with you—a crucial metric for any SaaS.
For any subscription-based services like yours, where customer retention is crucial, you would want this number minimized as much as possible.
So, how do you calculate a customer churn rate?
The customer churn rate is calculated as the number of customers who cancel or do not renew their subscription in a given period, divided by the total number of customers at the beginning of that period.
Take this simple example:
“SaaS-y Enterprise has 100,000 subscribers at the beginning of the month. Of these existing subscribers, 3,000 leave by the end of the month. In this example, the customer churn rate is 3% (3,000 ÷ 10,000). Meaning, 97% of customers choose to stay.”
However, in reality, computing for customer churn can be more complex. There are other techniques that can be applied, such as RFM segmentation, which groups customers into segments and uses three factors in the analysis: recency, frequency, and monetary value.
But why is it important to reduce churn for SaaS?
A high churn rate can be problematic for SaaS companies as it can indicate that customers are dissatisfied with the product or service. The higher your churn rate, the more customers you lose every month.
So let’s take a closer look at why you would want to reduce churn for your SaaS:
Stable revenue stream
For those (and that’s actually you) whose customers pay on a recurring basis, a low churn rate means that more customers are sticking with your product or service. The lower your churn rate, the more customers you retain every month—thus, making your revenue stream more stable.
More loyal customer base
You can improve the overall customer experience by fixing the issues that cause customers to leave or cancel their subscriptions. And this can result in better customer satisfaction, higher customer retention rates, and improved word-of-mouth referrals—driving further business development. A report says 94% of American customers will recommend a company whose service they rate as very good.
Increased potential for growth
And what is better than a stable revenue stream? Growth.
Companies with lower churn rates are more likely to achieve sustained growth over time. By retaining more customers, businesses can increase their recurring sales. When customers are happy with your product, they are typically more open to accepting offers for upselling and cross-selling.
Lower customer acquisition cost
Let’s be honest. Companies spend money and resources to acquire new customers and to compensate those lost to churn. This cost is called customer acquisition cost. So, if the churn is reduced, you also maximize its profitability by saving some costs. 😁 And the truth is, between retaining existing customers or acquiring new customers, the former is more cost-effective.
Now that the benefits of a reduced customer churn rate are clear, it’s time to address the elephant in the room:
What are the causes of customer churn where SaaS copywriting helps?
There are several causes of customer churn in a SaaS business, but here are the ones that are related to SaaS copywriting:
- Unclear messaging
- Confusing onboarding
- Boring emails
- UX copies that aren’t intuitive
Unclear messaging
When customers don't fully understand a product or service, or the value it provides, they can become frustrated and more likely become dissatisfied, leading to disappointment. And to make matters worse, customers may leave and seek other alternatives.
Here’s what I mean:
If, after reading your web copy, a customer signs up for your service but later learns that what he expected doesn't match the actual features and benefits, he/she’ll probably cancel the subscription.
Further reading: positioning post.
Confusing onboarding
When onboarded poorly, customers may not fully understand the value of the product or service. They may not fully understand how to use them properly. Sometimes, the onboarding process becomes too long and complex; it becomes exhausting for the customers, which could lead to poor user experience.
Now continuing with the previous example:
The customer reads the onboarding instructions (from onboarding emails) with inconsistent messaging and overwhelming information. Furthermore, the customer needs to go through multiple steps of filling out extensive forms, watching lengthy tutorial videos, and reading complex manuals to get started using the product.
Boring emails
When customers receive emails that don’t engage or fail to provide value or resonate with them, they may lose interest in your product or service. Over time, this lack of engagement can lead to churn.
For instance, a SaaS company sends a regular newsletter and automated boring emails. The customer then starts to view the company as spammy or annoying. In addition, the customer starts to simply ignore or delete the emails.
Let our CaaSocio team help you 👇👇👇
UX copies that aren't intuitive
UX copy, or user experience copy and content, are used to guide users through their experience. When customers are confused or unsure about how to accomplish their goals using your product or service, or when the wording in your product's user interface is not easy to understand, they may become frustrated and give up on your product or service.
If your SaaS has menu options with unclear labels, users may find it hard to navigate your app (or even the ideal course of action triggered when a button is clicked). The user may just switch to another software with a better user interface.
But let’s breathe. Enough with ‘cancellation’ and let's get to the solution!
5 “magical” ways your SaaS copywriters can do to reduce churn
- Convey the clear benefits and value of your product.
One of the most important ways that SaaS copywriters can reduce churn is by using clear and simple language in their copy. It helps potential users understand the benefits and value of the product or service and how to use it. In simple and easy-to-understand language, communicates your product's or service's benefits.
- Make the onboarding experience memorable
You can create an onboarding experience that users will remember and want to continue using by having your SaaS copywriters by making the process memorable and effective. Your SaaS copywriters should ensure that your onboarding materials are clear, to the point, and easy to follow, such as tutorials, video guides, or other resources to help users get up to speed quickly.
- Use smart and interactive (not boring) drip campaigns
Drip campaigns are a series of automated emails or messages sent to users. Engaging and interesting emails help keep customers interested and invested and prevent them from becoming bored and disengaged. You should have your SaaS copywriters use personalized messaging to create a more human and relatable user experience. Also, they can add visual aids in the emails so it's a more engaging and memorable user experience—and reduce churn.
- Keep the UX copies intuitive
Your SaaS copywriter’s role in reducing churn extends beyond just crafting engaging copy. You also need to ensure that your UX copies are intuitive and user-friendly so that users can easily navigate through the product and achieve their desired outcomes. They should use descriptive labels for buttons and menus so that users can easily understand what each option does. If possible, they should analyze customer behavior and feedback to identify pain points and use this data to inform copy and improve customer experience.
- Apply psychology to make users go back to the app
Your hired copywriters must understand the ways in which they can use psychology to reduce churn. SaaS copywriters can create a sense of urgency, use social proof, leverage the power of rewards, create a sense of belonging, and use persuasive language to motivate users to return to the app. With these principles in mind, SaaS copywriters will produce more compelling copy that ultimately reduces churn.
So, how does SaaS copywriting relate to customer experience and reducing churn?
Reducing churn is a critical goal for SaaS businesses, and effective copywriting can play a key role in achieving this objective. The benefits of reducing churn go beyond just retaining customers. It can also:
- give you a stable revenue stream
- more loyal customer base
- increased potential for growth
- lower customer acquisition cost.
Here at CaaSocio, we specialize in helping SaaS businesses in reducing churn through expert copywriting and UX design services. If you're looking to improve your SaaS product's copywriting and reduce churn, we invite you to book a call with our team today.
We'd be happy to discuss this with you and develop a customized solution for you. Book a call today!
