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Retaining your customers: How to recognise the warning signs

The warning signs were there the entire time but no one noticed. No one noticed that your highly-valued customer was on his way out. And when he told you that he was leaving, you were blind sighted.

Avoid being blind sighted again. As a SaaS provider, there are a number of easy-to-recognise factors that strongly predict when customers intend to abandon your service. Identify and tag these users as quickly as possible and intervene to change his mind before it is too late.

Once a customer begins to stray from your service, it becomes increasingly difficult as time passes to convince him to stay. It’s also more costly to recruit a new customer than it does to maintain an existing one. For instance, a study on customer retention versus acquisition costs concluded that it costs six to seven times more to attract a new customer than to keep an existing one (source: Bain & Co., a management consulting firm).

Here are the warning signs to look out for so that you know when you’re in trouble:

Warning sign #1: Reduced levels of user engagement

If customers are using your service frequently, they are likely satisfied with its performance. However, once their usage rates start to decline, customers become increasingly at risk of abandoning your service. It is critical that SaaS companies frequently and continuously track levels of customer engagement so that they can get a better handle of your churn risks.

As you can see from the diagram below, published by Intercom, a customer gradually begins to disengage from the service. If left uninterrupted, his activity will continue to decline and hit the “danger zone”. Once he hits the “danger zone”, the consumer’s activity descends exponentially more rapidly until eventually descending into a free fall. The customer is lost.

This highlights the importance of early intervention. It is critical that SaaS companies intervene before the customer hits the “danger zone”.


Warning sign #2: Credit card expiration date fast approaching

Expired credit cards are a primary cause of churn for many subscription based companies. On average, credit cards expire after 3 years, meaning 36 per cent of cards will expire over the course of a year.

When a customer’s credit card expires, he/she has to decide all over again whether or not they want to be a customer of your service. Perhaps their interactions with customer support didn’t “wow” them, or they weren’t fond of a new update. The expired card creates the perfect opportunity for them to shop around for other solutions.

This is a situation that SaaS providers need to avoid. Don’t wait for customer’s credit card to expire before taking action. Send out reminders to renew starting 60 days from the expiration date such that the customer can quickly update their credit card as an existing customer without causing them to reconsider service since they are no longer subscribed.

Warning sign #3: Visiting the cancel page

The last and most glaring sign is when the customer visits the cancellation page. While most companies don’t have a blaring siren that goes off every time someone visits the page, alerts should be in place to track the page’s activity.


We always have 20-20 vision in retrospect. Wouldn’t you want to have it in real time? Take heed of these warning signs to make sure you don’t get caught off-guard again.