5 Tips To Reduce Customer Churn In Consumer SaaS Products

Are you building a SaaS product and it is constantly losing retention? Here’s how I have hacked it on dozen SaaS products and how you can do it too.

From a retrospective and foresight angle, it is important to ask and answer these questions:

What internal trigger is your product addressing for people? Are your users still getting their job done?

What external trigger gets the user to your product and vice versa? Are your pull mechanisms tight and still relevant?

What is the simplest behaviour in anticipation of reward? Is your product still faster and easier to use?

Is the reward fulfilling, yet leaves the user wanting more? Are you still providing maximum value to users? Do you still speak with them?

What “bit of work” is done to increase the likelihood of returning? Do you have an actual retention strategy? Pricing? Channels, etc.

One of the core dynamics I advise startups to optimize for when building consumer products is the potential for habit formation, which is a superior indicator for product durability.  

Product Managers/Founders must build discovery vectors. Everything like deep ML algorithms to drive network effect helps double down on your product's strongest USP and drive conversations from other touch-points like social media and water-cooler communities like product hunts.

As a result, a leading metric that I recommend everyone to look for as a signal for habit formation is the frequency of usage. You would imagine a product used 6-12X daily, signals continuous triggers for customers.

I have found that when you combine a high frequency active usage and a strong retention strategy, your customer LTV is a lot higher, without burning cash on acquisition costs.

Speaking of triggers, an example is a push notification. This also depends on the content, the intent, and the value it drives for the user. This means it must be driven by an internal trigger like boredom, FOMO, and critical need.

As daily users of certain products, if we are not constantly rewarded by value, we will stop using the product. Continue to identify how the external and internal triggers balance your users, or else the return visits bar becomes a lot higher.

My prediction is that majority of the consumer products will be built on various formats (audio/video, synchronous, collaborative, content-driven, curated, and modeled by aligned interests vs ads). But for there to be durability, the core must be driven by motivation, mastery, and a tight feedback loop — people can quickly solve problems and make progress toward intrinsic goals, then they build long-term habits.

Finally, we must recognize a tradeoff here — Oftentimes, products may be capitalizing on users’ negative emotions. And for the product to be addictive, those negative emotions need to stick around.