What Do You Owe Customers That Don’t Renew?

Since the dawn of the age of the subscription, forcing people to keep paying to use some small part of a web service has been a common strategy.  Millions of folks still pay just to keep their “@aol.com” email addresses.

And making it hard to leave a subscription has probably been a strategy employed by some since the very first gym opened.

In SaaS the issues are bigger.

  • If a customer churns, what about embedded assets?  I.e., if they linked your product inside their website, their blog, their social media — does it disappear if they don’t renew?  What about all the hours they put into creating those assets?
  • If a customer churns, what about all the time they put into structuring the data?  Do you just give them a flat file of unstructured data?  That is basically worthless?

These strategies can sort of keep a customer from nominally churning.  But are they worth it?

  • The cost to host a nominal amount of customer data is often essentially zero.  Claiming otherwise is an insult to customers’ intelligence.
  • Word of mouth is the secret to scaling in SaaS.  Making your customers’ lives harder, and having bad interactions, doesn’t help here.

We’ve lived this recently again at Team SaaStr.  Two digital events platforms we used during Covid turned off all our access to assets and data if we didn’t keep using them.  Maybe that was smart.  But … we’ll only use them again under duress.

So a few thoughts here:

  • Instead of terminating access, what about dropping them to a Free tier when they “churn” to keep them in the family?  They might upgrade again later.  Allow access to legacy data and workflows, just limit the ability to create new ones. This rarely costs you anything at all.
  • Don’t hold integrations and workflows hostage.  It’s usually enough that they can’t create more.  You don’t need to turn them off, or turn off access.
  • Remember that they paid you.  Sales teams and many others forget this.  Yes, SaaS is often sold as a subscription.  But as part of that, we forget customers have already paid us.  Maybe the terms of use say they lose access to data if they stop paying.  But so what?  Treat everyone that was a customer, that paid you real money, as special.  Treat them the way you’d want to be treated.  Treat them as customers that didn’t just no longer want to pay, but rather, paid you quite a bit of money over time.  And maybe go the extra yard here and let them keep what they paid for.

Remember, the easier you make it for customers to leave, the easier you make it for them to join.  And to re-join later.

Challenge your processes here.

More here:

What To Do When A Customer Wants to Cancel A Contract

Published on June 12, 2021

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