Churn is a term used to describe the percentage of customers who leave or stop using a service/product over a given period. Calculating the churn rate is essential for SaaS companies to find out user success. It enables them to monitor the overall health of their business and understands when and where they need to take corrective actions.
A study published by KBCM Technology Group suggests that SaaS businesses’ median annual revenue churn is a little over 13%, and the customer churn rate is 21%. Of course, an acceptable churn rate depends widely on the kind of market and the size of your business, but a SaaS business should aim to keep both its annual revenue churn and customer churn as low as possible. This is especially important for retaining new customers, who are crucial for a company’s growth.
UX mistakes to Avoid in SaaS Products
When it comes to customers churning on a particular product, factors can include how well they were onboarded, the app’s usability, and their overall customer experience. SaaS UX is an essential aspect of your product’s success and can play a decisive role in whether customers stick around or leave. Customer retention and satisfaction rely heavily on the quality of the customer experience and how well you understand their needs. UX can help reduce churn by making it easier for your customers to connect with what your product does for them. For example, SaaS companies such as Zoom and Slack have improved their UX to deliver excellent experiences that meet user needs and deliver added value over competitors.
So it is all the more necessary to manage and adjust UX mistakes that cause SaaS customers to churn. Users will churn on a product if the UX creates an unpleasant experience, is slow and clunky, or lacks the interface. Designers need to be careful and avoid some common mistakes when designing SaaS products. So let’s take a look at each of them along with the possible solutions.
1. Insufficient or Too Many Features
Though simple interfaces make it easier for customers to understand the products, having insufficient features will force them to look for alternatives that can better meet their business requirements, increasing the churn rate. Another common mistake is assuming that adding more features will improve your product. On the contrary, adding too many features can increase the complexity of an already complex service, making it difficult for users to adopt the solution.
Solution: So designers should think before adding features willy-nilly. A simple solution is to create a clear feature-focused map to better align the product to the features.
2. Scalability Issues
A SaaS product needs to be scalable. Scalability issues can cause users to churn when you cannot meet their expectations for speed and performance. Slow-loading pages, network delays, and performance problems can ultimately affect user satisfaction. Scalability is essential, but at the same time, designers need to ensure that the focus on scalability does not detract from what makes the product unique.
Solution: There are other ways to scale your business without compromising on the quality of services the products offer. Working on performance optimization, speed, and scalability together, can serve as a solid solution. Process automation is another way to get there without compromising on your customers’ experience.
3. Slow Setup Procedures
SaaS products depend on a fast and easy setup process to get users up and running in a short period so they can immediately experience the value. But if a product takes too long to set up, customers may lose patience during the process or leave because the process is too time-consuming. Likewise, delays and errors during the sign-up process can turn customers away. And if this happens, it is easy to see why those users will churn.
Solution. The solution is simple, designers need to make the sign-up process faster and not keep customers waiting for authorization and provisioning. The onboarding flow should be designed to be as smooth as possible.
4. No Space for Customer Engagement
User engagement can build a loyal customer base. Engaged customers are more likely to trust a product and won’t churn as easily as those who can’t engage with the product or don’t want to. Engagement will provide a steady stream of product improvements and customer insights to designers, making it less likely for users to churn.
Solution: SaaS products need an engaged user-base with regular engagement channels such as email marketing campaigns or newsletters that foster open communication between users and the product. This will help them to keep in touch with their customers’ changing needs, improving features over time.
5. Weak Customer Journey
Designers need to research existing products and understand what features users love or hate to avoid churn. The customer journey should not be made up of pain points. Instead, it should be as smooth as possible to build stronger relationships between customers and businesses.
Solution: You can do this by performing a customer experience audit which helps you better understand how users interact with your product, identifying their pain points and what they need to improve the overall product experience. This way, customers will stay with you longer because they will feel like their needs are being met.
6. Not Utilizing Customer Feedback and Reviews
One of the most important reasons customers stay with a product is because they feel their feedback and ideas for improvement are heard and implemented. In UX, designers cannot ignore the voice of the customer. If customers don’t feel like their ideas are heard and matter, they will be more unsatisfied with the product overall and more likely to churn.
Solution: One way to fix this is by implementing customer-centered design principles whenever possible. Bring the user into the process and show them, through research and testing, how much your product evolves based on their feedback. Provide customer feedback channels like online support forums, a blog for posting questions, Twitter or Facebook accounts where users can reach out to your business. If customers think they have no voice in improving the products they use, they will churn.
7. Failing to Strike a Balance Between Aesthetics and Functionality
Functionality and aesthetics are both necessary. The product must be functional enough to facilitate users’ needs and be aesthetically pleasing to engage them with the design. Focusing too much on one or the other will drive users away. Customers will not stick around if they are unhappy with how your business looks or if it fails to function correctly.
Solution: It is best to balance these two when designing your product. The aesthetics of a product is important, but they need not overshadow the design’s primary purpose.
8. No Prototyping and Testing
This is an obvious tell that the design has significant flaws. But, unfortunately, designers can’t see if their designs are working before going live. So, it is vital to develop prototypes.
Solution: Designers should always include prototyping and user testing as a part of their process to help them better understand how users interact with their product, making designing easier and more efficient in the long run. Prototyping includes low-fidelity wireframes, common in Agile processes, or high-fidelity prototypes.
9. Not Utilizing the UX Hook Model
The UX design hook model helps designers understand how to create their products to hook and retain users. This model allows you to identify which features and functions will keep your customers coming back. Failing to understand the customers and implementing the UX hook model will make churning more likely.
Solution: Designers should employ the hook model in their design process whenever they can. The UX Hook Model breaks down product engagement into four stages—trigger, action, variable reward, and investment. When all four are successfully implemented together, they lead to habit formation in users.
Customer churn rate can either make or break a business. Customers churning too often can become a serious problem and affect the business’ revenue and growth, whether because of bad customer service or lack of quality products that don’t meet their needs. These issues can easily be avoided with proper design processes and UX design. SaaS UX designers should always keep these mistakes in mind, as they are some of the most common ways for a SaaS product to lose users. Implementing strategies to help fix these issues will lead to happier customers and more revenue.
Knowing your business and the users who use your product is vital to creating a satisfying experience. UX UI designs can make just that; be aesthetically pleasing while still offering a great user experience. The key is to develop products that are functional and easy to use for customers while also being attractive enough to engage them with the design.