How Quipu kept churn rates under one percent ever since their launch
Going into its fourth year, one of the things the Quipu team and its CEO Roger Dobaño are proud of is their low churn rate.
Quipu is an online billing software that solves your daily administrative tasks. And as with any SaaS product, churn is a number they keep close track on, says Dobaño:
I’m in touch with the churn numbers daily, but we measure it monthly, like most startups.
A low churn percentage is not only validating that they’ve built a product people like, but keeping the rate down over years has also taught them a lot about how their customers think and act, according to the CEO:
For a B2B SaaS company, it’s often quite expensive to acquire new users, so we’re very proud that we’ve been able to hold churn under one percent from the start.
It’s not rocket science, with more customers come more responsibilities, and that means a higher demand for service.
As you’re scaling your customer base, one of the most important things you need to do is to make sure your customer service team scales together with your customers. The easiest way to keep churn down, is to have someone that really understands the product and cares about the customers.
Even though many of your customers never need any help with the product, it’s part of the trust relationship you build, as the customers know that there are humans to talk to at the other end of the software.
The first 12 months Quipu didn’t hire customer care people says the CEO:
For the first year of our business, I did all the customer support myself. Not only because the team was small, but so that I always knew what our customers thought about our product.
He says he’s still in touch with the customer service team, as it’s one of the best ways to know how to develop and improve the product.
He explains that the way customer service agents should attend struggling users could be an article in itself. The baseline is to listen a lot, be understanding, patient and get to the core of what kind of problem the user is facing. There’s usually always a way to fix it.
No automated unsubscribe button
It’s not about making it hard for customers to unsubscribe, according to Roger, but it’s about understanding why they want to leave.
If you want to unsubscribe, we’ll get notified when you push the button, and we’ll get in touch. Their reason for unsubscribing is often connected to a task we can help them achieve very easily, preventing them from leaving and making them happy again.
And if the customer has decided to leave anyway, you’ll at least have the data on why, if you actually talk to them. It’s also for security reasons, as people’s financial data has to be treated carefully.
When you’ve grown a significant amount of customers or users you should also consider measuring CSAT and NPS metrics.
- Also read: How To Improve Your Customer Satisfaction Score and Net Promoter Score
Apart from great service, upselling is another way to prevent customers from choosing another product. The more ways people use your product, the lesser is the chance of the person leaving you.
With a very low churn rate, you’re actually able to reach negative churn, if you’re able to upsell enough.
When you have a payback period of one year, which is normal in SaaS companies, you need to know that people are happy especially in the beginning to keep the retention rate high.
Apart from speaking with the customers, tracking their movements and tasks inside the product is a very good way of seeing where it goes right and wrong.
For example, in Quipu one of our services is managing invoices. After looking at the user movements, we now know that the retention rate is much higher if the user creates three or more invoices. With this info we’ve been able to retain more customers over the years.
Dobaño adds that it’s also important to use movement trackers to contact users who are struggling, even before they complain or think about leaving.
Don’t go crazy with features
It’s both upsides and downsides to talking a lot with your customers (obviously more positive sides though). One of the challenges is that people have a lot of thoughts on what kind of features you should develop next.
If you’re working B2B, you’re in touch with professionals, and they’re aware of what type of features would make their day easier.
This results in new features that both keep the retention rate high and make it easier to acquire new users.
But it is easy to take water over your head and create ten good features to please everyone, instead of making 3 perfect features. It’s a difficult balance, according to Roger:
We try to focus 60 percent of our capacity on building our existing product better, and 40 percent of our time making features for acquiring new customers.
The holy two percent
When you’re working with high growth products, it’s often essential to be raising funding from investors.
A motivation in keeping your churn low is that most investors will not bet on a SaaS startup if it has a churn rate of 2 percent or more.
So even though you’re acquiring a lot of customers early on, having churn in mind from the first minute, can be more valuable than you think.
Some last tips on the list to prevent churn you should consider is:
- Make meaningful partnerships with complimentary services.
- Don’t let credit cards expire.
- Let the whole team know your churn rate and be aware of changes