The Leaky Bucket Problem
Acquiring a US customer costs 5-7x more than retaining one. **Churn** is the silent killer of SaaS valuation. Reducing it requires looking at your product data, not just your billing dashboard.
1. Improve Onboarding
Most churn happens in the first 90 days. If a user doesn’t find value quickly (‘Time to Value’), they leave. Use interactive walkthroughs (like Pendo or WalkMe) to guide users to their ‘Aha!’ moment.
2. Semantic Activity Tracking
Don’t just track logins; track *value actions*. If a user hasn’t created a report in 3 weeks, they are at risk. Automated email campaigns should trigger to re-engage them.
3. Annual Plans
Incentivize annual capability. Customers who pay upfront for a year have 3x lower churn rates than monthly subscribers. They are financially committed to making the software work.
4. Exit Surveys
When they do leave, ask why. Is it price? Missing features? Bugs? Feedback loops are the only way to plug the holes in the bucket.
