Some companies are frozen due to the CV-19 crisis, but some have benefited. Many more are challenged. So there is no evidence (yet) of a general churn crisis in SaaS. But even companies that have benefited from the crisis have to double down on churn prevention - a company thriving in the crisis has a target on it, and all the competition is coming after it. Whichever category you are in, the focus of reducing churn is (as always) providing maximum possible value to customers. But companies in every category have to adapt and update the customers "Value equation" to adapt to changing times. The session will cover some of the basics of churn prevention, feature Zuora data on what some companies are doing in the crisis, and look at how the usual strategies need to be updated in 2020
4. zuora.com fight-churn-with-data.comfight-churn-with-data.comzuora.com
•There is no single COVID-19 churn crisis for SaaS companies
•Overall (average) impact on churn rates are slight... So far
3 SCENARIOS FOR SAAS CHURN IN 2020 (OUTLINE)
3. Business is
challenged
2. Business is
unaffected or
improved
1. Business is
stopped
9. zuora.com fight-churn-with-data.comfight-churn-with-data.com
LETTING CUSTOMERS
HIT PAUSE
• Zuoraresearchfrom2019showed
thatcompaniesreducedchurn
morebyallowingsuspension.
• Hardtoextrapolateto2020
www.zuora.com/resource/subscription-suspend-
and-resume-impact-on-churn-mitigation/
Source:ZuoraSubscriptionImpact
Report:COVID-19Edition
www.zuora.com/resource/subscription-impact-report/
change with an uptick in customer churn.
Research from the Subscribed Institute has found providing customers
the option to suspend, and then resume a subscription to be one of
the most effective strategies.
IMPACT ON CHURN RATE
Our data shows that offering customers the option to suspend
subscriptions can help businesses save 1 out of every 6 churning
customers.
In order to understand the impact of subscription suspensions on
churn, we analyzed a group of subscription businesses that saw their
churn increase during 2018. These companies had an average annual
churn rate of 37% going into 2019 (for reference, the average churn
for all companies at that time was 27%).
During 2019, some of the companies in the study used suspension of
subscriptions as part of their churn reduction efforts, and some did not.
Our study found that at the end of 2019, both types of companies had
reduced their churn on average, but their success varied significantly.
A study was performed on companies that saw an increase in churn in
2018. One year later, at the end of 2019, those companies that allowed
suspension of subscriptions had reduced their churn by 12.2% while
those companies that did not allow subscription suspensions reduced
their churn by only 5.9%. The benefit of suspending subscriptions
corresponds to saving approximately 1 in 6 additional customers.
12. zuora.com fight-churn-with-data.com
MARKETING
Engagement campaigns direct
customers to the features & content
that will be most compelling for them
DATA DRIVEN CHURN REDUCTION
PRODUCT
Make more of the features &
content that customers love
CUSTOMER SUCCESS &
SUPPORT
Proactive and reactive assistance to
customers in need. Includes
onboarding & training.
SALES / PRICING
Right size plans to give
customers value, not a
discount
fight-churn-with-data.com
16. zuora.com fight-churn-with-data.comfight-churn-with-data.com
How customers value your product may be shifting
• Wariness of spending
• Both consumers and businesses
• Shift in priorities
• Safety vs. Exploration
• New options have emerged
• Make sure you are not crowed out!
UPDATING THE VALUE EQUATION