SaaS Alert: Churn is at all times high. Here is what you can do to protect Revenue

Rising Churn Rates in SaaS ​

The software as a service (SaaS) industry, on average, tries to keep the yearly customer loss rate at 5% or lower for well-established companies. However, the typical SaaS company loses 12% of its revenue from existing customers each year and 13% of its customers leave entirely. If your churn rates are higher, there is a possibility your business is affected by some of the factors below.

Factors Contributing to High Churn Rates:

• Market Saturation & Competition: The proliferation of SaaS solutions has made it easier for customers to switch providers, seeking better features or pricing.​
• Lower Switching Costs: Advancements in integrations and APIs have reduced vendor lock-in, enabling smoother transitions between services.​
• Poor Onboarding & Engagement: Inadequate onboarding experiences can lead to low product adoption, causing customers to abandon the service early.​
• Economic Downturns: Financial uncertainties prompt businesses to reevaluate and often reduce their SaaS expenditures.​
• Ineffective Customer Success Strategies: A reactive rather than proactive approach to customer success can fail to address issues before they lead to churn.​

Impact of High Churn Rates:

• Revenue Loss: High churn rates directly translate to decreased recurring revenue, hindering growth and profitability.​
• Increased Acquisition Costs: Replacing lost customers requires additional marketing and sales efforts, escalating overall costs.​

When does churn happen?

Churn happens when businesses fail to know users’ behavior patterns to know if they are meeting their needs.

Personalisation is critical for your users to track their preferences, attitudes, and willingness to pay.

Without relevant data indicating user success, it is extremely challenging to foresee and prevent eventual churn. Regular monitoring of user behavior patterns can be helpful in becoming more user centric, responding to specific customer needs and reducing churn.

How to track user behavior patterns successfully?

Three factors matter most to a victorious and scalable approach to measure the user behavior pattern: data, triggers, culture, and methods.

Getting the correct data (not more data)

A recent survey shows 67% of participants said their biggest challenge was using the right tools to find the right data. Obtaining the correct data is key to knowing best-in-class user behavior patterns.

One common problem is how to drill down users’ data to stop perceived discrepancies and gaps causing SaaS churn, and so they can know how to generate insights and personalize product promotion campaigns for the better.

The market is swamped with wonderful tools to help retain your customers. Choosing the best tool for your need is an imperative task.

Use user behavior patterns to improve these 4 points:

1. Fix Onboarding: Ensure Users Reach the AHA Moment Fast

Why? Many users churn early because they don’t understand the product's value or get stuck in the onboarding process.

✅ How to Fix It:

• Streamline onboarding: Reduce steps required to start using the product.
• Guide users to AHA: Use interactive walkthroughs, tooltips, or checklists to highlight key features.
• Personalize the experience: Segment users based on their intent and provide relevant starting points.
• Reduce time-to-value: Make sure users experience a meaningful outcome quickly.
• Automate reminders: Use emails, in-app messages, or notifications to bring back inactive users.

🛠 Tactics:

• Use product tours (e.g., Pendo, Appcues) to guide new users.
• Send progress nudges via email/SMS to re-engage inactive users.
• Offer a quick-start template or pre-configured setup for easier activation.

2. Improve Engagement: Create Stickiness

Why? Users who don’t form habits with the product will eventually stop using it.

✅ How to Fix It:

• Build engagement loops: Encourage users to perform key actions repeatedly.
• Leverage social proof: Show how peers or similar companies benefit from the product.
• Introduce gamification: Progress tracking, streaks, or milestone badges can reinforce usage.
• Offer proactive support: Live chat, knowledge bases, or community forums can help users succeed.
• Nudge users at the right time: Use behavioral analytics to trigger reminders for underutilized features.

🛠 Tactics:

• Set up email or in-app nudges to encourage users to complete setup or use a feature.
• Offer weekly reports with insights that reinforce the product’s value.
• Use leaderboards, rewards, or usage milestones to encourage continuous use.

3. Optimize Retention: Keep Paying Users Engaged

Why? Customers churn when they feel they’re not getting enough value from their subscription.

✅ How to Fix It:

• Regularly communicate value: Send success stories, product updates, or feature highlights.
• Monitor engagement trends: Identify at-risk accounts based on inactivity patterns.
• Improve customer support: Proactively check in with users and resolve friction points.
• Encourage expansion: Upsell relevant features before customers consider alternatives.
• Collect continuous feedback: Run NPS surveys or feedback loops to improve weak areas.

🛠 Tactics:

• Use customer health scores to track engagement and identify potential churn risks.
• Set up automated check-ins for accounts showing signs of disengagement.
• Offer quarterly business reviews (QBRs) for enterprise users to reinforce ROI.

4. Win-Back & Re-Engagement Tactics

Why? Sometimes, churned users can be brought back with the right strategy.

✅ How to Fix It:

• Identify why they left: Analyze churn reasons through exit surveys or interviews.
• Offer a comeback incentive: Discounts, free trials, or exclusive content can entice them back.
• Fix the pain points: Address key concerns that caused them to leave in the first place.
• Stay in touch: Keep them in the loop through occasional product updates.

🛠 Tactics:

• Send a personalized reactivation email with an incentive or update.
• Run a survey for churned users to gather feedback and learn from it.
• Offer a limited-time promo to re-engage users who canceled.

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How to Use Journy.io to Address Churn with Account Health Scores

Journy is a customer intelligence platform that enables businesses to analyze user behavior, predict churn risks, and improve retention using account health scores and AI-driven insights. By leveraging customer data, Journy helps businesses engage proactively, personalize experiences, and optimize retention strategies.

1. Analyzing Your Churn Metrics & Account Health Scores

🟢 Why it matters:
Gong highlights that the most important action to improve retention is analyzing churn metrics. Journy.io  takes this further by assigning Account Health Scores to indicate user engagement levels and churn risks.

✅ How to use journy.io :

• Monitor Account Health Scores: Score customers based on engagement, product usage, and sentiment.
• Track churn risk indicators: Identify accounts with dropping activity, low feature adoption, or negative feedback.
• Segment at-risk customers: Use AI to classify users into different risk categories (low, medium, high risk).
• Automate alerts for declining health scores: Notify CS and sales teams when an account’s score drops.

💡 Example Use Case:

• An enterprise customer’s health score drops from 85 to 50 due to reduced logins and inactive users → Automatically assign a Customer Success Manager (CSM) to re-engage the account.

Note: The data used to build Health Scores is aggregated data you already have : Product, CRM, Intercom, Zendesk, Gong, Stripe, etc. Health scores are formed by smart behavior signals combined with your indicated segment specific signals that reflect your customer behavior patterns.

2. Proactive Engagement: Prevent Churn Before It Happens

🟢 Why it matters:
Most users don’t complain before leaving; they silently disengage.  Journy.io  helps engage users before they churn by using account health scores to predict risk and trigger proactive interventions.

✅ How to use journy.io :

• Use account health scores to prioritize outreach: Focus on accounts that are declining in engagement.
• Automate proactive support: Trigger interventions when a customer’s score drops below a set threshold.
• Empower CS & sales teams: Provide real-time health scores in their CRM to act early.

💡 Example Use Case:

• If an account’s health score drops by 20 points in a week, automatically trigger an in-app message or a call from their CSM.

3. Personalizing User Experiences to Boost Retention

🟢 Why it matters:
Generic experiences lead to disengagement. Journy.io  personalizes onboarding, feature recommendations, and messaging based on account health scores and real-time user data.

✅ How to use Journy.io :

• Segment users based on health scores: Send different messages to high-risk vs. healthy accounts.
• Trigger personalized nudges: Guide users toward features they haven’t explored yet.
• Recommend relevant upgrades or add-ons: Show contextual upsell opportunities based on product usage.

💡 Example Use Case:

• A customer’s health score is stable at 90 but they haven’t used a premium feature → Send an email or in-app guide showcasing how they can get more value from it.

4. Automating Re-Engagement & Win-Back Campaigns

🟢 Why it matters:
Not all churn is final. Journy.io  helps recover lost users by tracking churned accounts, analyzing their past health scores, and sending behavior-driven re-engagement messages.

✅ How to use Journy.io :

• Monitor health scores of previously churned users: If they start visiting the website or interacting with emails, trigger a win-back offer.
• Automate reactivation sequences: Send targeted messages based on why they churned.
• Use AI-driven predictions: Identify users most likely to return and prioritize outreach.

💡 Example Use Case:

• A former customer’s health score starts improving (they’re checking documentation, logging in occasionally) → Send a tailored reactivation campaign with a limited-time offer.

Gong lists Analyzing your Churn Metrics as the most important action to take when trying to improve retention and prevent churn. The easiest way to accomplish that is to analyse user behavior data insights with tools like journy.io.

Customer Testimonial:

One satisfied customer shared their experience with  journy.io  

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Key Takeaways

The challenges of high churn rates are significant barriers to growth in the SaaS industry. However, with strategic interventions focusing on proactive customer engagement these challenges can be effectively addressed.

✅ Journy.io  helps prevent churn by:

1. Analyzing churn metrics & account health scores to detect early warning signs.
2. Proactively engaging at-risk customers based on declining health scores.
3. Personalizing user experiences to improve engagement and satisfaction.
4. Automating re-engagement & win-back campaigns to recover lost users.

⚡ Actionable Next Steps:

• Set up account health scores Journy.io  to track user risk levels.
• Automate proactive outreach when health scores drop.
• Personalize onboarding and engagement strategies based on score trends.

Read more about HOW Journy manages to help you prevent significant churn rates here.

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