As a VP of sales at early stage SaaS companies, what’s your best advice for reducing churn rate?
A few things that always work to drive down churn in the early days — and later:
- Make sure you have a strong Head of Customer Success … whose #1 goal is reducing churn. Too many early stage VPs of Sales don’t have a strong “wing person” running customer success. Go help the founders make the hire if there isn’t one. And importantly — resist the urge to have this Head of CS own upsells. That may seem to help you, but it will lead to a de-focusing on driving down churn. More here.
- Go visit all your top customers in person, even once a quarter if you can. Far fewer customers churn if you visit them in person. We’ve been saying this on SaaStr for 10+ years (!), and yet I see fewer and fewer sales execs flying to meet customers. Yes, it was tough in 2020. It’s not tough today. More here.
- Read your team’s emails and listen to their calls. If you don’t, they’ll often say things that are just plain wrong. And lead to unnecessary churn. More here.
- Put together a strong onboarding team. And drive up your activation rates and time-to-value. Try to get every single customer to fully be on-board within 30 days in general — or much faster for many apps. If they are slow to use you, they may never really use you. And they’ll be much more likely to churn. More here.
- Do pilots, if customers want them. Don’t resist them. Too many sales execs resist pilots, since they seemingly add risk to the deal, and often force you to resell the deal just a few months later as the pilot ends, in essence. But a pilot also aligns everyone to value and gets them on the same page. And it in essence roots churn out and identifies it early, during the pilot — when there’s still a chance to do something about it. Just remember to do Paid Pilots only. No one values a Free Pilot, so no one put in the work on the prospect / customer side. More here.
A Key to Startup Success: Getting Out and Actually Visiting Customers pic.twitter.com/8stW3MIMfA
— Jason ✨Be Kind✨ Lemkin (@jasonlk) July 24, 2023
(Churn image from here)