3 SAAS Customer Success Mistakes When Onboarding New Members, and How You Can Avoid a Similar High Churn Rate

How You Can Avoid a High Churn Rate

Is it easier to leap over a six-inch step or a 10-foot wall? The six-inch step is easier, duh.

The more you are asking your new member to do within the first few hours or days of your membership, the more difficult it will be to get that new member to the Retention PointTM.

Open an email and click a link. This is a low bar, and a large percentage of your new members will succeed at this task. If you ask them to enter a bunch of data and create new daily habits of using a new software tool, few of those members will be successful.

Customers will act in proportion to their excitement about the outcome they will receive. If the potential outcome is exciting, the member will take action. If the outcome is unclear and the work appears burdensome, you can expect your new member to churn.

This makes the Retention Point™ more difficult to reach for SAAS companies. If you aren’t familiar with the term, SAAS stands for software as a service. Rather than paying upfront for a software product, you can subscribe to the tool. For the subscriber, it lowers the upfront expense and provides ongoing support. For the provider, you generate ongoing monthly revenue as long as your customer uses your product.

SAAS companies have all the same opportunities as any membership program. Your goal is to get members to the Retention Point™ where they become rabid fans who love you, refer their friends, and become lifers.

The key opportunity for a SAAS company is that the more your members use your product and build habits around your SAAS subscription, the more difficult it is for them to cancel. Most SAAS companies do have a higher long-term retention rate than other subscription businesses.

However, this retention opportunity is also the biggest challenge. Incorporating your SAAS tool into everyday life takes work. The more your Retention Point™ depends on your members doing work and implementing, the more difficult it will be for you to get customers to the Retention Point™.

Within the SAAS world, there’s a lot of discussion about creating customer success. The idea is that you must help your customer implement, use your product, and experience a benefit. This can be important, but it skips over the single most important element of getting to the Retention Point™.

Getting to the Retention Point™ is hard enough without making it even more difficult for yourself. Allow me to show you three mistakes I’ve seen my SAAS clients make.

SAAS Member On Ramp™ Mistake No. 1: The Apology

First, the worst: A client asked me to review his Member On Ramp™. Below, I’ve included a lightly edited version of the welcome screen all new users saw. I’ve made minor changes to protect his identity because this is as ugly as it gets.

We have some great updates to share!

On Monday, November 16, SAAS sent out an email to all its members about a very important update made to the system. For your convenience, we have posted the letter in its entirety below:

Hello, SAAS Members!
First, we want to start off by saying THANK YOU, as ever, for being such patient and fantastic members! We know that we have been experiencing a few growing pains lately, and your pa-tience, your feedback, and your enthusiasm for what this system can be has been an incredible driving force for our management team. We are all eager to see the updates and changes that will be taking place in the next few months, particularly as we look forward to making our new-and-improved full-system launch at the start of the new year.

Allow this example of a SAAS Member On Ramp™ to be a warning to you and your team. Why would you broadcast to every new member that there have been service problems and you appreciate their patience? You should never air your dirty laundry in front of your newest member. This is worse than a restaurant posting on its marquee “HELP WANTED” or “UNDER NEW MANAGEMENT.” As a potential customer, you know that place sucks if that’s the smartest thing the owners can think of to write on their sign.

Your brand-new member is hopeful that your product is the solution to their problems. Why would you welcome your new member with the “apology” you wrote to explain your service gaps to existing members? Your newest member doesn’t know about yesterday’s problems. There’s no reason to create new doubts in their mind.

What if you walked up to the door of a restaurant you were trying for the first time and noticed a note taped to the door that’s an apology to all the existing customers for serving them food that made them sick? Would you walk through that door, or would you leave?

SAAS Member On Ramp™ Mistake No. 2: The New Feature

The second unforced error SAAS programs make in their Member On Ramp™ is to feature “New Features.” Your newest customer doesn’t need to know that your product didn’t have these features in the past. Instead, your newest member needs to know where to start and why.

Within SAAS, as with any membership program, your goal is to get your customer to the Retention Point™ as soon as possible. The quicker your members get to the Retention Point™, the more of them you’ll keep for life.

Conventional wisdom dictates that this means the new members must implement to incorporate the SAAS tool into their lives. SAAS experts call this “customer success.” However, there’s an important step that gets overlooked that’s more important for the Retention Point™.

Think for a moment: What happens before anyone does anything? There has to be a decision.

Most people assume the decision to take action was made when the purchase was made. However, the purchase itself is so easy, especially with SAAS products where the initial cost is relatively small. When faced with setting aside time to implement this new tool into your life, it’s too easy to back out and fall into old habits.

Your Member On Ramp™ must motivate your members to take action. Take the opportunity when your new member joins to resell your member on the benefits of implementing your product. Help your new member visualize what life will be like after they implement your product.

Even if SAAS companies avoid the two mistakes I’ve mentioned so far with their Member On Ramp™, they often make a third one: starting with teaching.

SAAS Member On Ramp™ Mistake No. 3: Start With Teaching

The single biggest Member On Ramp™ mistake is to focus on teaching. As if all you must do is show your members what to do, step by step, and somehow that will result in success. There are already a billion step-by-step training videos on YouTube about what you teach. Your member doesn’t need you to deliver more “how to.”

Instead, make the outcome that’s waiting on the other side of the task as clear and as exciting as possible. The bigger the prize, the more motivated your member will be to get a task completed so they can claim that victory.

About Robert Skrob

The problem with subscription membership programs is that members quit, I fix that problem. For more than 20-years I have specialized in direct response marketing for member recruitment, retention and ascension in diverse subscription members environments including non-profit associations, for-profit publishers/coaching, subscriptions and SAAS companies. For an evaluation of your current churn rate and how I can improve it, contact me here. I discover there are often two or three quick wins you can implement within a week to lower churn immediately, let’s talk about your quick wins.
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